washington d.c. — U.S. Senators Susan Collins (R-ME) and Maggie Hassan (D-NH) introduced bipartisan legislation to help parents in Maine, New Hampshire and across the country save for college. the Helping parents save for the College Education Act would encourage families to invest in a 529 college savings account, which can be used to pay two– or a four-year college or vocational school. The legislation would provide tax cuts for families who save for college and allow families to transfer unused savings from college to a child’s retirement account.
“Education plays a vital role in opening doors of opportunity to all Americans, but the rising cost of a college education threatens to close those doors to many families across the country,” said Senator Collins. “529 plans are a great option for parents to save for college expenses, but uncertainty about whether their children will choose to pursue post-secondary education in the future can be a barrier to openness and investment in an account. Our bipartisan bill would remove this barrier by improving the flexibility of 529 plans for low- and middle-income households, helping more parents prepare financially and more children achieve their dreams.
“The high cost of higher education hurts families’ bottom lines and hinders student success,” mentioned Senator Hassan. “That’s why Senator Collins and I introduced bipartisan legislation that takes common-sense steps to make it easier for families to save for their child’s education, including lowering taxes for families who put in the money. set aside for college. I urge my colleagues to join us in supporting this bill, which will help lower the cost of higher education, strengthen our economy, and enable more young people to learn the skills they need to thrive.
“As administrators of Maine Section 529’s college savings plan, NextGen 529®, FAME supports these proposed changes. We appreciate Senator Collins’ efforts to make 529 Education Savings Accounts more flexible and attractive to consumers,” mentioned William Norbert, FAME Government Affairs and Communications Manager.
“We are thrilled and grateful to Senators Collins and Hassan for sponsoring this bill to expand the savings credit to 529 college savings plan contributions, and also allow families to transfer unused funds of a 529 plan in an IRA”, mentioned Colleen Quint, President and CEO of the Alfond Scholarship Foundation. “We know families care about their children’s future and want to rely on the $500 Alfond Grant we give to every baby in Maine. We also know families aren’t always sure of what the future holds for them and are sometimes hesitant to take advantage of it.” step to open an account and save because they might want or need some flexibility in the future. This bill provides exactly that kind of guarantee that funds invested for their child’s future will actually be available for their future, even if not all the resources saved are needed for education. Programs like ours across the country are looking for ways to encourage families to take the first step to saving for their child’s future. This bill will help more families take this step with confidence.
Studies have shown that young people who have savings accounts — even with modest balances — are more likely to attend and complete college. the Helping parents save for the College Education Act would incite lower– and middle-income families to invest in 529 college savings accounts by providing a tax credit covering 50% of contributions from low- and middle-income families. It would also allow families who aren’t using funds from their 529 account to transfer those dollars to a Roth IRA retirement account — meaning if a child doesn’t choose to go to college, families can still take advantage of the savings.
the Helping parents save for the College Education Act relies on senators Collins and Hassan are working to expand higher education and workforce development opportunities for more Americans. The government funding bill of 2022 that was recently signed into law included $20 million that senators worked to secure to help college students in rural communities achieve their education goals and access career opportunities. ‘job. In March 2021, Senators Collins and Hassan also joined in introducing the bipartisan Law on the revival of our businesses by supporting students (JOBS), who expand the Pell Grant to cover workforce training programs.
To read the text of the bill, click here. For the one-pager, click here.