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WYDEN, SMITH SPONSOR NEW LEGISLATION
TO KEEP HIGHER EDUCATION SAVINGS TAX-FREE
Senators follow through on Bipartisan Agenda
goal to support families, education
May 24, 2005
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 When withdrawn to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.
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