No, I’m Serious. A Bipartisan Effort to Improve College Savings.

One wouldn’t know it from watching the nightly news, but it turns out that some members of Congress are a.) actually working across the aisle in a constructive manner and b.) prioritizing things that don’t involve the words “stimulus,” “auto company,” or “bank.”

Some such efforts have produced the Savings Enhancement for Education in College Act, a bill introduced by Reps Earl Pomeroy (D-ND) and Pat Tibieri (R-OH) to improve 529 college savings plans. Provisions include:

• Extending the Saver’s Credit to include 529 plans. The Saver’s Credit is a wonderful tool that low-income families can use to enhance their retirement savings. Enhancing the credit by making 529 contributions eligible is a simple step with positive and powerful implications for families trying to save for college in a down market. Besides, some very smart folks have been pushing for this for a while (shameless program promotion on p. 7, thank you).
• Making permanent a temporary provision allowing 529 funds to be used for computers and educational software. This simply makes permanent a provision in the much ballyhooed stimulus bill.
• Giving 529 account owners more flexibility by allowing them to change investment options twice a year. This makes permanent a recently announced IRS rule. My thoughts on this here.

It’s a welcome development to see policymakers — additional co-sponsors include Reps Kendrick Meek (D-FL), Lynn Jenkins (R-KS), and Ron Kind (D-WI) — thinking about ways to improve tax-advantaged savings tools as well as promoting tax time as a promising one for savings. More importantly, this is a signal that Congress is serious about attacking the challenge of college saving among the less-well-off — a topic that New America’s newly-launched College Savings Initiative plans to attack for years to come.