Lynn Jenkins Op-Ed: Time to boost—not tax—college-saving plans
Since 1995, America has fallen from first to nineteenth in college graduation rate and educational mobility among countries studied by the Organization for Economic Cooperation and Development. Throughout the twenty eight countries examined in the study, about half the children at least matched the level of their parents’ education.
Unfortunately, a larger than average percentage of children in the United States has less education than their parents. This is a startling statistic as Americans look to compete for jobs in a competitive global economy. Research shows that the higher the educational mobility, the greater the cohesiveness of a country. As a nation, we cannot afford to continue to fall behind other countries and expect our children to have the bright future we all dream they achieve. As a mother with two kids currently enrolled in college, that is not a result I am prepared to accept.
As America falls behind in graduation rates, it is also becoming increasingly exorbitant for parents to afford higher education. From 2003 through 2013, the College Board reported that college tuition prices had increased close to a whopping eighty percent. Student loan debt across the country now stands at an astronomical $1.2 trillion – a number which is higher than the combined GDPs of Australia, New Zealand and Ireland, and exceeds the combined credit card debt in America.
Studies have demonstrated how the existence of any sort of college savings account substantially increases the chances of a child attending college. As little as $500 in a savings plan sees children three times as likely to enroll, and four times as likely to graduate from college. Therefore, a sensible solution must be making saving for higher education more attainable for any American.
529 college savings plans enable families to start saving for their children from the minute they’re born. Contributions can be as little as $10 and can be withdrawn tax-free to pay for a whole array of college costs – including room and board. Since it became tax-free to withdraw 529 funds in 2001, 1 million accounts have turned into 12 million. These plans provide a concrete and practical way for hardworking Americans to help send their children to the higher education institution of their choice.
Recently, President Obama introduced a proposal in his budget to begin taxing withdrawals from 529 college savings plans. This would have rendered these plans virtually useless. After a public outcry from both parties, the administration admitted that it wasn’t worth the political fight. Although they still refuse to accept that taxing families saving for college is bad public policy, they say they intend to remove that proposal from the budget.
529 college savings plans are an essential tool for today’s parents working tirelessly so their children can get a higher education. That’s why I introduced my bill, H.R. 529 — that has garnered strong bipartisan support — to expand, strengthen, and improve these plans. Essentially, if they are easier to use, more people will use them. This legislation would modernize these accounts by making computers a covered expense, which we all know is a necessary item for any 21st century college student. Going further, the legislation would expand 529s to allow any refunds to be redeposited tax-free and also updates the tax code to eliminate unnecessary and cumbersome paperwork.
Employment is harder to come by in this new transnational jobs market and anything as sensible and straightforward as reinforcing and reinvigorating 529 plans is a measure that should receive universal bipartisan support.
This sort of commonsense solution is an obvious step to help hardworking families send their children to college, whether that is a four-year college, community college, or technical school. If we intend to help America climb back to the top of the ladder for college graduates across the globe, 529 college savings plans are the perfect vehicle to ensure that future generations receive the education they need to contend for the jobs they deserve. Strengthening 529s will only make America’s economy healthier and more competitive in an ever-changing marketplace.
Congresswoman Lynn Jenkins (R-KS) is the vice chair of the House Republican Conference and a member of the House Ways and Means Committee.