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Lynn Jenkins: Helping millennials pay for school

Congresswoman Lynn Jenkins | The Topeka Capital-Journal

Millennials are this country’s future. By 2020, those born between 1982 and 2003 will make up more than one-third of the population, and by 2025, they will account for as much as 75 percent of the U.S. workforce.

This much-discussed generation of creative, tech-savvy brunch lovers will decisively lead our nation in just a few short years, and it is imperative to give them the tools to succeed if we as a nation are to succeed.

Right now, maybe the biggest burden slowing down our young adults is the cost of higher education. With each passing year, already astronomical university expenses continue to climb unabated. Upon completion of their degrees, most recent college graduates are getting saddled with an average student loan debt of $37,000.

For millennials and future generations to come, 529 college savings plans and ABLE accounts (tax-free savings plans for those with disabilities) could make a significant difference when it comes to tackling education expenses. These tax-free accounts can be used for university costs such as tuition, books, and room and board.

529 and ABLE accounts have clear benefits for families and students planning for college, however, government regulations and needless red tape restrict the full potential of these savings accounts. Currently, spending rules and penalties prohibit withdrawing from a 529 account to pay off student loans. A second barrier to these plans is low visibility. While there has been a steady effort to raise awareness of 529 and ABLE savings plans, the 13 million 529 accounts over only a small fraction of kids heading to college.

In the 114th Congress, I introduced legislation with Rep. Ron Kind to expand, modernize and strengthen tax-free 529 college savings plans to help more Americans save for their children’s education. I am proud to say that this legislation passed the House of Representatives with a veto-proof majority vote and was later signed into law by President Obama as part of a broader legislative package.

Earlier this year, I again teamed up with Congressman Kind to introduce H.R. 529, the 529 and ABLE Account Improvement Act of 2017. This bipartisan bill will expand the ways in which these college savings accounts may be used.

Instead of restricting funds to only be withdrawn for approved higher education costs, this legislation will remove penalties and make it possible to use 529 and ABLE accounts to pay off costly student loans. It will also allow account funds to be put towards charitable contributions if the account owner so chooses.

H.R. 529 will help to raise the profile of these tax-free accounts by encouraging employers to include 529 plans in their benefits package. Tax incentives will make it easy for small businesses to add a 529 contribution program to employees, and my bill will also allow companies to match employee contributions up to $100.

Lastly, this legislation will make it possible to convert 529 accounts into ABLE accounts and roll over the funds tax-free, allowing folks to better save and pay for disability-related expenses.

America’s students deserve the best chance possible to chase their ambitions — be it to become a civil engineer, a computer coder or a certified public accountant.

Whatever the dream, 529 and ABLE accounts can help budding generations receive the education they need. And with college savings secured and student debt better managed, brunch-loving millennials will be ready to lead the nation with the wind at their backs.

Lynn Jenkins is a member of Congress who represents the 2nd District of Kansas.

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