When I was elected Chair of the College Savings Plans Network (CSPN), never in my wildest imagination did I think I would be debating the value of one of the core benefits and characteristics of 529 plans with the President of the United States. Nonetheless, that is exactly what happened this past week when President Obama announced his plan to repeal the tax benefits associated with 529 college savings plans.
As soon as the President’s proposal was announced as part of his State of the Union address, members of CSPN rallied together like never before to unite in an advocacy effort to defend the value of 529 plans for the more than 12 million American families that own accounts. Our goal was to remind the President and our elected officials that planning and saving are vital components to ensuring higher education enrollment rates continue to rise in our country and that families receive the support they need in helping their children fulfill their dreams.
Yesterday, we, along with millions of American families, collectively exhaled a huge sigh of relief when we learned that our activism and public education campaign paid a huge dividend. The President announced he is removing his proposal and families will continue to have their 529 savings and withdrawals remain tax-free, further reinforcing the importance of saving.
There is an old saying that a goal without action is just a daydream. The same can be said about achieving a college degree. It is nearly impossible without implementing a plan and saving. With college savings, families and students take control of their future by investing their hard earned dollars in themselves. While there are a diverse number of ways 529 plans provide financial returns to account owners, there is one investment we cannot compete with and that is the results that a college degree provides. No other investment helps an individual, community and country prosper better than education.
The resounding support for 529 plans that rang loud and clear from all parts of the country this past week created a valuable opportunity for us to raise awareness about the importance of these plans and the impact they can have in reducing our country’s reliance on student-loan debt.
We thank all who affirmed their commitment to saving by speaking out in favor of retaining the existing 529 plan tax-free structure, as well as President Obama for hearing our voices. It is our hope that these voices not only helped preserve a crucial benefit for American families, but will also inspire millions of additional families to join those who are already saving with 529 plans.