This past month both the US Senate and House of Representatives introduced legislation to make enhancements to 529 College Savings Plans. These tax-free plans are used by millions of families to save for their children’s future higher education expenses. These plans have proven to help limit or eliminate future student loan debt, while aiding to increase access to higher education.

Student loan debt reached $1.3 trillion, with the 2014 graduating class finishing college with an average of $30,000 in loans. (Utah’s average student loan debt is $22,418.) Of the 37 million people carrying student loan debt, one-third are over the age of 40 and almost 2 million people over the age of 60 are still paying off loans.

When Americans are saddled with student loan debt, it is more difficult for them to buy homes, cars and other products, purchases that boost our economy. They are also limited in their ability to invest in their future by saving for retirement and other long-term goals.

On the flip side, 12 million Americans have saved approximately $250 billion in 529 plans, which is less than a quarter the amount of student loan debt in our country. It is the goal of all state 529 plans to reverse this trend and to someday have college savings out-pace student loan debt. The only way to do that is to continue to improve 529 plans by offering more incentives for families to save.

Enhancements like those that are part of the proposed legislation in the Senate (SB 335) and House (HR 529) help all American’s see and understand the value of saving through 529 plans. These companion bills specifically call for:

• Making computers an eligible expense;
• Allowing the redeposit of funds without negative tax implications in certain extenuating circumstances (e.g. a student gets sick at the beginning of the term);
• Updating outdated accounting rules.

Implementing common sense improvements to 529 plans so more families see the benefits of saving will only help the overall health and well-being of our country over the long-haul. Simply put, when students graduate with little to no debt they have the resources to innovate, purchase, invest, volunteer and create. Now is the time to pass this legislation that strengthens 529 plans and if you agree, we encourage you to reach out to your Representatives and Senators in Washington D.C. to let them know of your support of these enhancements.