Rep. Renacci: College Accounts Crucial for Middle Class

The expansion and modernization of the popular 529 college savings plans is important to help make it easier middle-class families to save money for their children's higher education needs, Rep. Jim Renacci said in Saturday's GOP address.

Last week, more than 400 House lawmakers voted for a bill that clarifies that computers are qualified expenses, removes paperwork burdens, and allows families to re-deposit college refunds without having to worry about taxes or penalties, the Ohio Republican said.

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The bill came after President Barack Obama last month proposed taxing the plans, later dropping his idea after a public outcry over the matter.

"Why would we make saving for college even harder?" said Renacci. "We talk all the time about rewarding people who work hard and play by the rules — well, that’s what 529 plans are. They empower families to set up accounts for their children — right from when they’re born — and then down the line they can use that money — tax-free — on books, fees, tuition, and room-and-board."

Renacci explained that he was the first in his family to go to college, and as he was from a working-class union family. He paid his own way through school, working jobs such as driving trucks or working on a road crew.

"As an accountant, I’ve seen countless parents struggle with putting away money for their kids’ tuition," he said. "You know how it is: you want to make sure they have it better than you do. But at a time when the cost of just about everything is going up and incomes are barely moving, that job’s only gotten harder."

Renacci said there about 12 million 529 accounts open across the United States, up from 1 million accounts in 2001.

"Why would we stop that growth?" he said. "So the government can take even more of the money we’ve worked so hard to put away?"

The bill is important, Renacci said, "because we all know that a good education leads to greater opportunity and a stronger economy. So let’s take this step to make college more affordable and easier to plan."

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