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PENNSYLVANIA GOV. ROBERT P. CASEY SIGNS COLLEGE SAVINGS PLAN INTO LAW

PENNSYLVANIA GOV. ROBERT P. CASEY SIGNS COLLEGE SAVINGS PLAN INTO LAW
 HARRISBURG, Pa., April 3 /PRNewswire/ -- Pennsylvania Gov. Robert P. Casey today signed into law legislation created by Pennsylvania House Speaker Robert W. O'Donnell (D-Philadelphia) and Senate President Pro Tempore Robert C. Jubelirer (R-Blair) that will help families save for their children's college education.
 The measure, which a House-Senate conference committee created by incorporating the two leaders' programs into one bill (Senate Bill 2), was unanimously passed by the House (194-0) last week. The Senate also unanimously approved the measure.
 "This new law will give many parents greater peace of mind and many children a better chance to reach their dreams," O'Donnell said. "We have an obligation to find ways to make college more affordable for more young people. We also have an obligation to encourage those families who've managed to set aside a bit of money to use that towards their greatest investment -- their children's future."
 O'Donnell's plan, known as the College Savings Bond program, will require the state to offer Pennsylvanians the chance to purchase tax- exempt "zero coupon" bonds. All interest income will be compounded semi-annually and paid when the bonds mature. The bonds will be offered at accessible prices and will accrue interest over time -- the longer the maturity, the greater the payback. The bond offerings are expected to range in increments between $950 and $3,500.
 For example, if the parents of a two-year-old bought a College Savings Bond at a discounted rate of $1,425 this year and let it mature for 16 years, the bond would pay $5,000 (assuming an 8 percent yield) by the time their child was ready to enter college.
 If the grandparents of the child bought a second bond with the same maturity, when the child turned 18 and the bond came due, $10,000 would be available to fund the child's college expenses.
 Under Jubelirer's Tuition Account Program (TAP), the parent or other saver would gear their contributions to the existing tuition rate at any of the public universities. TAP funds could also be used toward an education at another college or university. The program would allow for incremental contributions. Another feature provides that TAP accounts will not diminish a student's eligibility for student financial assistance programs.
 The governor's and state treasurer's offices will be working out the logistics of the bond offerings. They are expected to be made available during this year.
 /delval/
 -0- 4/3/92
 /CONTACT: Nancy Nowicki of state Rep. Robert W. O'Donnell's office, 215-849-2200/ CO: Pennsylvania House of Representatives ST: Pennsylvania IN: SU:


CC-KA -- PH025 -- 4851 04/03/92 13:07 EST
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Publication:PR Newswire
Date:Apr 3, 1992
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