As a well-educated, well-trained workforce is essential to maintaining a competitive economy, we need to ensure that young adults have access to higher education that provides them the necessary tools to help build a stronger economy. Yet, each year we see the costs of college and other higher education options continue to rise, leaving many families straining to find ways to meet those costs. It is vital that hardworking American families have access to financial planning programs that help them prepare for the rapidly rising costs of college.
Virginia, along with almost every other state throughout the country, offers 529 plans, which represent an innovative way for families to plan for the costs of their children’s higher education over time. They allow families that invest in their children’s’ educational expenses to withdraw those savings tax free, thus providing millions of American families a useful tool to help defray the cost of tuition and other expenses.
During his State of the Union address, President Obama announced his plan to tax college savings when withdrawn from a 529 account. This tax would remove a powerful incentive for families to save for their children’s higher education and represents just one way in which the President’s proposed tax increase would unfairly place new burdens on working families. The American people spoke up, and the President, who received pressure from both sides of the aisle, dropped his plan to tax 529 college saving withdrawals. I am pleased President Obama decided to listen to the American people and withdraw his tax hike on college savings. This tax would have hurt working families already struggling to get ahead. We should be looking for ways to make college more affordable – not less.
Last Congress, I introduced the bipartisan College Savings Enhancement Act, which would update current law to allow state-run prepaid college savings plans, like Virginia’s prepaid 529 plan, the freedom to invest more broadly, enhancing their ability to meet their obligations to the families purchasing their plans. I plan to reintroduce this bipartisan bill, and it is my hope that the Senate and the President will work with us to implement this commonsense measure.
The House is also considering legislation introduced by my colleagues Congresswoman Lynn Jenkins (R-KS) and Congressman Ron Kind (D-WI). They introduced H.R. 529 to modernize and improve tax-free 529 college savings plans. These are exactly the types of bipartisan ideas we should advance to help families save for higher education.
Providing information and opportunities for Fifth District families to save and plan for higher education expenses are critical to providing individuals the ability to further their education, and I look forward to pursuing new avenues to ensure that families are able to invest in their children’s futures.
If you need any additional information or if we may be of assistance to you, please visit my website at hurt.house.gov or call my Washington office: (202) 225-4711, Charlottesville office: (434) 973-9631, Danville office: (434) 791-2596, or Farmville office: (434) 395-0120.
Robert Hurt represents Virginia’s Fifth District in Congress.
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