The House passed legislation on Wednesday to enhance college savings plans that initially would have been reduced in President Obama's budget this year.

Passage of the bill, 401-20, comes after the Obama administration backed off a proposal to eliminate tax breaks for the college savings accounts in its fiscal 2016 budget. 


Nineteen Democrats and one Republican, Rep. Walter Jones (R-N.C.), voted against it.

The White House withdrew the plan only a few days before the budget's release earlier this month after Democrats lobbied the president to leave it out. About 12 million Americans use the 529 plans, though the White House maintains that wealthier families are the main beneficiaries. 

The bill passed in the House would expand the types of qualified expenses for the savings accounts, also known as 529 plans, including computer equipment, software or Internet access expenses used for college.

In addition, the measure would allow the re-depositing of funds without penalties if a student withdraws from college. Current law subjects refunds from colleges after withdrawals to taxes and fees.

Rep. Lynn JenkinsLynn Haag JenkinsK Street giants scoop up coveted ex-lawmakers Pompeo seen as top recruit for Kansas Senate seat Exiting lawmakers jockey for K Street perch MORE (R-Kan.), the sponsor of the bill, H.R. 529, said lawmakers were "appalled" by the original budget plan.

"We fundamentally disagree with the direction of the president's policy proposal, and instead we want to make 529 college savings plans more consumer friendly and reflective of the realities faced by students today," Jenkins said.

Most Democrats joined with Republicans to support the measure.

"So 529s is another vehicle to try to alleviate that student indebtedness issue that's affecting more and more kids and families throughout the nation. We ought to fix it by making it paid for," said Rep. Ron Kind (D-Wis.), who co-sponsored the legislation.

White House press secretary Josh Earnest said the administration doesn't oppose the bill.  

The Joint Committee on Taxation estimated that the measure would increase the federal deficit by $51 million over 10 years.