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Advocacy

College Savings

Expanding access to college

529 College Savings Plans are the primary tax advantaged way for families to save for college.  As a part of the Bipartisan Budget Act of 2015, Congress and the Administration approved common sense legislation to make improvements to the 529 program.  

NAST and its affiliate, the College Savings Plans Network (CSPN), continues to work with Congress to improve 529 plans as Congress considers other changes to the tax code and the reauthorization of the Higher Education Act in 2019.

female student smiling with illustrated graduation cap and diploma
happy college graduates posing for selfie

College Savings Plans Network (CSPN)

A Network of the National Association of State Treasurers

CSPN is the leading objective source of information about Section 529 College Savings Plans and Prepaid Tuition Plans.

CSPN brings together administrators of 529 savings and prepaid plans from across the country, as well as their private sector partners, to offer convenient tools and objective, unbiased information to help families make informed decisions about saving for college.

 

In the 117th Congress, NAST and CSPN’s primary goal is to make college and career training more affordable and accessible to all. To help us achieve this goal, our major legislative priorities are:

1. SAVERs Credit – Congress created the Saver’s Credit in 2001 to encourage middle- to low-income individuals to save for retirement. In order to increase access for low and middle-income students and reduce their reliance on student loans, NAST & CSPN encourage Congress to include contributions to Section 529 qualified tuition programs to the list of deferrals or contributions that qualify for the Saver’s Credit.

2. Encourage Saving for College at the Workplace – The workplace is often where Americans make decisions about saving.  Tax code incentives that promote employer contributions into the retirement plans of employees have proven to be an effective method to increase retirement savings. Tax code incentives that similarly promote employer contributions to Section 529 Qualified Tuition Programs will be an effective method of encouraging continued education among employees. We believe employers could have a broader impact on the long-term financial wellness of Americans if they are given a role in assisting and accommodating participation in a 529 plan.

3. Simplify Student Aid and 529s to Encourage Saving – An overwhelming majority of 529 plan administrators view the perceived impact of a 529 account on federal financial aid as the top regulatory obstacle to American families fully utilizing 529 plans.  The CARES Act included provisions to simplify the federal financial aid process which will assist 529 plan participants. NAST & CSPN urges Congress to take further action to revise the Higher Education Act (HEA) to change the current federal financial aid methodology to: (1) exempt the value of all assets in all 529 accounts held for the benefit of a student from counting as parental assets in determining a family’s expected contribution and, (2) to the extent CARES does not address the issue, exempt the value of all 529 plan distributions, including from accounts held by grandparents, noncustodial parents or states and charities, from counting as income when distributions are used towards eligible expenses.

4. Freedom to Invest in Tomorrow’s Workforce – Although 529 plans may be used for many certificate programs and qualified apprenticeship programs, meaningful gaps remain. We support legislation which would expand the use of a 529 account to recognized postsecondary credential programs under the Workforce Innovation and Opportunity Act.  The programs included in this initiative provide the basis for developing competencies in many of the technical skills and jobs that employers find increasingly difficult to fill.

 

NAST / CSPN College Savings Resolutions

Supporting a Solution to Minimize Student Debt for the Next Generation
Support for promoting awareness of 529 College Savings Plans as a part of the solution to rising student loan debt.
Approved September 15, 2020.
Regarding the Treatment of Section 529 Qualified Tuition Plans Under the Higher Education Act
Support for revisions to the Higher Education Act to include language in the reauthorization of the Higher Education Act of 1965 to change the current federal financial aid methodology related to the treatment of Section 529 qualified tuition plans.
Approved in 2008. Amended and renewed in 2011, 2014, 2017 and 2020.
Preserving the current tax treatment of Section 529 Qualified Tuition Programs
Support for the continued tax treatment of 529 plans and opposition to efforts to repeal or limit that treatment.
Approved in 2013. Amended and renewed in 2016 and 2019
Inclusion of Contributions to 529 Plans in the Saver's Tax Credit
Support for the inclusion of Section 529 programs in the Saver’s Credit to Encourage more American Families to Save for the Rising Cost of Higher Education
Approved in 2007. Amended and renewed in 2010, 2013, 2016 and 2019.
Expand the use of 529 Plans to Include Student Loan Payments
Support for the use of 529 proceeds to make payments for student loans for postsecondary education opportunities.
Approved in 2019.
Expand the use of 529 Plans to include Apprenticeship Programs
Support for the expansion of eligible use of 529 proceeds to include postsecondary education programs including registered apprenticeship programs.
Approved in 2019.
Employer Incentives to Contribute to an Employee's 529 Plan
Provide Incentives and Direction to Employers to Encourage Employee Savings in a Section 529 College Savings Program
Approved in 2007. Amended and renewed in 2010, 2013, 2016 and 2019.
529 Plan Rollovers to IRA
To allow participants in a Section 529 College Savings Program the additional flexibility to rollover excess funds from a 529 Plan to an IRA
Approved in 2013. Amended and renewed in 2016 and 2019.
State Tax Policy and Other Benefits between States for Section 529 Qualified Tuition Programs
A Resolution Supporting States' Efforts to Develop Tax and other Incentives to Promote Saving for Postsecondary Education
Approved in 2006. Renewed in 2009, 2012, 2015 and 2018.
Distribution Period for 529 Plans
To Support Legislation or Policy that would clarify for 529 Plan Participants the period of time by which to take Distributions for Qualified Higher Education Expenses
Approved in 2012. Renewed in 2015 and 2018.