Bipartisan duo seek to expand college accounts

A bipartisan pair of House tax writers joined together Monday to roll out a measure expanding tax-free accounts for college savings that have been a point of contention since President Obama’s State of the Union address. 

{mosads}The bill from Reps. Lynn Jenkins (R-Kan.) and Ron Kind (D-Wis.) would allow computers to be a qualified expense for so-called 529 accounts, roll back paperwork requirements and let parents put payments refunded from colleges back into an account tax-free within 60 days.

The measure is a response to Obama’s proposal to tax withdrawals from 529 accounts as part of a broader tax and education package. Obama argues that the current set-up for the accounts disproportionately help higher earning families, but saw Republicans and conservative groups rip his proposal as a tax hike on the middle-class.

Jenkins and Kind said Monday that their proposal would help strengthen a program that has grown to almost 12 million accounts in less than two decades, and helped taxpayers put aside some $225 billion for college.

“Saving for our children’s education is one of the most important, and at times, most difficult aspects of being a parent,” Jenkins said in a statement. “This bipartisan, sensible legislation strengthens an extremely popular savings plan for middle class families so that all American’s have the opportunity to send their children to the college institution of their choice.”

“Helping students attend college ultimately makes America more competitive in the global marketplace, but with rising tuition costs and the growing crisis of student loan debt, we need to use every tool we can to help families afford higher education,” Kind added.

The White House has stressed that, while 529 accounts are tilted toward the wealthy, the president won’t consider revamping them outside of a broader package, like the one he offered recently that included free community college. Liberal groups have also noted that bipartisan bills in the past have tried to make similar changes to the popular college accounts.

House Ways and Means Chairman Paul Ryan (R-Wis.), who has said he wants to try to find common ground with Obama on tax issues, praised the bill from Jenkins and Kind.

“The solution to skyrocketing tuition costs isn’t to make saving for college more expensive, as the president has proposed,” Ryan said in a statement. “529 plans are a great option for families who want to save for their children’s education, and we should strengthen these tools, not tax them away.”

Tags Paul Ryan Ron Kind

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