Following your college savings intuition

American families recognize the value of a dollar. And they recognize how important each and every dollar is when it comes to saving for college for their loved ones.

Their intuition is that saving for college tuition is a high priority. However, over the past decade, college costs have risen nearly 51 percent. For a family, figuring out how to pay can be quite taxing. Many families rely on financial aid to combat costs, assuming that assistance will come in the form of scholarships and grants that do not have to be repaid. In practice, however, more than half of federal financial aid comes in the form of loans that not only must be repaid, but also incur interest.  Recent reports indicate that student loan debt is almost at $1.2 trillion.

{mosads}As a means to offset the need for loans and keep families from getting saddled with debt, 529 college savings and prepaid tuition plans are a manageable and affordable alternative, designed to encourage early saving for future higher education expenses. By the middle for 2014, American families invested a record $244 billion in 529 plans, according to data collected by the College Savings Plans Network. 

With over 12 million accounts opened, more and more families are relying on 529 plans to pay for higher education. Our Congressional leaders can help further support this valuable vehicle for college savings and ensure that 529 programs nationwide remain as effective and versatile as possible. A bill recently reintroduced in the 114^th Congress by Reps. Lynn Jenkins (R-Kan.) and Ron Kind (D-WisI) seeks to make 529 plans more flexible and remove some of the obstacles participants face while saving for college. 

H.R. 529 would make computers a qualified expense, roll back paperwork requirements and let parents put payments refunded from colleges back into an account tax-free within 60 days.

None of these changes are costly to the government. Rather, they are common sense measures designed to help families save for higher education costs. 

No one should be denied access to higher education because they cannot afford it. A 529 plan is a powerful tool for helping families cope with the rising cost of college – the improvements in this bill will help put a college degree within reach of more children.  

We encourage our Congressional leaders to support H.R. 529. With the enhancements H.R. 529 will afford, 529 plans can continue to help students and families defray college expenses and burgeoning student loan debt, ensuring that today’s students get the education they need to become tomorrow’s leaders.

Lochner is chair of the College Savings Plans Network and Director of the Guaranteed Education Tuition in Washington.