U.S. Rep. Rodney Davis (R-IL) highlighted efforts to enhance tax-advantaged 529 college savings plans on Wednesday while speaking at the University of Illinois Urbana-Champaign’s campus.
Davis and Illinois State Treasurer Michael Frerichs (D-IL) discussed federal efforts to strengthen 529 college savings plans that help low- and middle-income families plan for and save for college.
“As a parent with one college student and two on their way very soon, I understand the importance of saving for college and how difficult it can be for families,” Davis said. “529 savings plans allow parents to plan for their children’s futures. Treasurer Frerichs and I want to make sure as many families as possible can take advantage of these plans. There are simple changes we can make now to modernize these accounts and make them more beneficial to low and middle income families.”
Davis supported legislation last year that the House approved to authorize the purchase of computers and internet access with 529 plans. He also co-sponsored a bill that would enable 529 plans to be used to pay off student debt.
“We are proud to work with Congressman Rodney Davis to make saving for college easier for Illinois families,” Frerichs said. “Every year, the cost of college tuition increases at least two times the rate of inflation. As students graduate with more debt, it is important for us to strengthen our 529 college savings plans to help families prepare for their child’s education.”
Strengthening 529 plans is just one way Davis is working to assist families and students pay for college and manage debt. Davis introduced the bipartisan Employer Participation in Student Loan Assistance Act, H.R. 3861, in October to incentivize employers to subsidize employees’ student loan repayments through pre-tax contributions. Employers can already use such pre-tax contributions to subsidize ongoing tuition expenses for employees.
“The Employer Participation in Student Loan Assistance Act encourages employers to be part of the solution by allowing them to offer an employee benefit that will help graduates pay down their student debt,” Davis said. “With outstanding student loan debt totaling more than $1 trillion, we must find ways to engage the private sector and help graduates manage their debt.”
Davis is currently working on legislation that would encourage employers to match the college savings of their employees by providing a tax credit.