Washington, DC - U.S. Senators Ron Wyden (D-Ore.) and Gordon Smith (R-Ore.) joined a bipartisan coalition of their Senate Finance Committee colleagues today to introduce legislation extending the tax-free status of programs that help families save for college, professional and vocational education. Wyden and Smith committed to work together on expanding tax breaks for the savings plans - known as Section 529 plans - as part of their Bipartisan Agenda for the 109th Congress, released earlier this year.
Section 529 plans are special state-administered programs that allow families to save money in an account in which the earnings grow with all Federal income taxes deferred. When withdrawn to pay for "qualified higher education expenses" such as tuition, room, board and books, the savings remain Federal income tax-free. However, that tax benefit is set to sunset on December 31, 2010. The legislation introduced today would make those tax benefits permanent.
"At a time when income gaps and education gaps are growing between rich and poor, higher education savings plans can help families plan a bright future for their kids," said Wyden. "Keeping these savings plans tax-free is a bipartisan goal because all of Oregon can benefit from a vibrant, educated workforce bringing business to our state and strengthening our communities."
"College is expensive and most families need help planning for it," Smith said. "529s are great tools and their flexibility makes it easier for people to save up for one of the most important investments they will ever make."
The mission of college savings plans is to increase access to higher education by offering families a simple, safe, affordable and dedicated way to save for college tuition.
The Oregon 529 College Savings Network currently includes three savings plans from which to choose, with $440 million invested in more than 70,000 accounts.
All 50 states and the District of Columbia have a Section 529 qualified tuition program in operation; across the country, more than seven million children are enrolled in some type of 529 plan, with more than $67 billion dedicated to their future college costs.
Authors of the legislation introduced today include Finance Committee Chairman Charles Grassley (R-Iowa) and Ranking Member Max Baucus (D-Mont.). The legislation will come before the Finance Committee, of which Wyden and Smith are both members, for consideration. Companion legislation to the Senate bill is also being considered in the House of Representatives.
For more information about 529 college savings accounts available in Oregon, visit www.oregon529network.com.