The College Savings Plans Network (CSPN) monitors federal legislative and regulatry activities and promotes legislation that will positively affect Section 529 plans. Building upon the success achieved in 2006 with passage of the Pension Protection Act, legislation that included a provision to make permanent the income tax exclusion for qualified distributions from Section 529 college savings programs, the National Association of State Treasurers (NAST) and CSPN have launched a new phase of federal advocacy.
In the 118th Congress, NAST and CSPN’s primary goal is to make college and career training more affordable and accessible to all. To help us achieve this goal, our major legislative priorities are:
1. SAVERs Credit – Congress created the Saver’s Credit in 2001 to encourage middle- to low-income individuals to save for retirement. In order to increase access for low and middle-income students and reduce their reliance on student loans, NAST & CSPN encourage Congress to include contributions to Section 529 qualified tuition programs to the list of deferrals or contributions that qualify for the Saver’s Credit.
2. Encourage Saving for College at the Workplace – The workplace is often where Americans make decisions about saving. Tax code incentives that promote employer contributions into the retirement plans of employees have proven to be an effective method to increase retirement savings. Tax code incentives that similarly promote employer contributions to Section 529 Qualified Tuition Programs will be an effective method of encouraging continued education among employees. We believe employers could have a broader impact on the long-term financial wellness of Americans if they are given a role in assisting and accommodating participation in a 529 plan.
3. Simplify Student Aid and 529s to Encourage Saving – An overwhelming majority of 529 plan administrators view the perceived impact of a 529 account on federal financial aid as the top regulatory obstacle to American families fully utilizing 529 plans. The CARES Act included provisions to simplify the federal financial aid process which will assist 529 plan participants. NAST & CSPN urges Congress to take further action to revise the Higher Education Act (HEA) to change the current federal financial aid methodology to exempt the value of all assets in all 529 accounts held for the benefit of a student from counting as parental assets in determining a family’s expected contribution.
4. Freedom to Invest in Tomorrow’s Workforce – Although 529 plans may be used for many certificate programs and qualified apprenticeship programs, meaningful gaps remain. We support legislation which would expand the use of a 529 account to recognized postsecondary credential programs under the Workforce Innovation and Opportunity Act. The programs included in this initiative provide the basis for developing competencies in many of the technical skills and jobs that employers find increasingly difficult to fill.