The following prepared testimony was submitted on May 1, 2008 to the Committee on Ways and Means, Subcommittee on Select Revenue Measures. In it, Cramer explains that 529 College savings plans can be effective savings platforms, but urges reforms to make them more inclusive.
The full text is available below as a PDF download.
Senior Research Fellow, Asset Building Program and Vice President
Ray Boshara is Vice President and Senior Research Fellow at the New America Foundation, a Washington-based think-tank. Until July 2009, he was the director of the Asset Building Program, and launched the Next Social Contract and College Savings Initiatives at New America as well.
Qualified Tuition Plans, commonly called “529 plans” after the
applicable section of the federal tax code, were implemented in their
present form in 2001. These state-sponsored plans can help families
save for their children’s college education, or an adult can open an
account to use for their own post-secondary expenses. Under current
law, earnings and qualified withdrawals are exempt from federal income
tax liability. Because these tax incentives are scheduled to expire
after 2010, Congress intends to act to make these provisions permanent.
California has the opportunity to make 529 accounts more attractive to low- and moderate-income families by providing a match for savings they put towards a college education.
