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Rep. Kelly Commends Passage of Bipartisan Bill to Strengthen College Savings Plans

February 25, 2015

WASHINGTON — U.S. Representative Mike Kelly (R-PA) – a member of the House Ways and Means Committee – issued the following statement today regarding the passage of H.R. 529 in the House of Representatives by a bipartisan vote of 401-20. Rep. Kelly is a co-sponsor of this legislation.

“I am wholeheartedly pleased that the People’s House has passed this bipartisan bill to expand, modernize, and strengthen tax-free 529 college savings plans. These plans make it easier for millions of hardworking American families to send their children to college and pursue the careers of their dreams. With college tuition and student loan debt reaching daunting new heights, it makes perfect sense not only to protect this tool from reckless and misguided attacks but to also build upon its success by updating it to meet today’s realities for students and their parents. I applaud my colleagues on both sides of the aisle for supporting this bill and look forward to it passing in the Senate.”

NOTE: The importance and popularity of 529 college savings plans have grown substantially as more and more middle-income families are using them to save for college. Since the bipartisan creation of Section 529 in 1996, these plans have expanded to nearly 12 million accounts and have resulted in college savings of more than $225 billion for American families. The Pennsylvania 529 College Savings Program consists of 13 different investment plans and helps Pennsylvanians keep pace with increasingly expensive college tuition.

H.R. 529 makes three important improvements to 529 savings plans, enhancing what is a successful model for helping students attend college. It achieves the following:

  • Modernizes 529 plans by adding computers to the list of qualified expenses;
  • Allows funds to be re-deposited without taxes or penalties if a student withdraws early for medical reasons and obtains a refund from the school; and
  • Removes unnecessary paperwork burdens that date back to before withdrawals from 529 plans became tax-free.

Read more about the bill here.

 

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