The Senate Finance Committee plans to consider a measure on Wednesday to expand how tax-free accounts for college saving can be used.
The action in the Senate comes after the House easily passed the same bill in February, and after President Obama sought to roll back the so-called 529 accounts.
{mosads}Finance Chairman Orrin Hatch (R-Utah) said the bill would help families combat the rising education costs that are “creating a burden for many of our nation’s young people.”
“529 college savings plans have a proven track record of helping more families save for college and invest in their children’s future,” Hatch added.
Students could use 529 accounts to pay for computers under the bipartisan legislation, which would also pare back paperwork requirements and make it easier for families to put refunds from colleges back into their accounts.
Tax writers from both parties – including Sens. Chuck Grassley (R-Iowa), a former Finance chairman, and Chuck Schumer (N.Y.), the Senate’s next Democratic leader – support the legislation. Only 20 House members opposed the measure when it passed in February.
The White House hasn’t expressed opposition to the 529 bill. But Obama did propose taxing withdrawals from 529 accounts earlier this year, arguing that the accounts currently offer disproportionate benefits to higher earners. The president was forced to back away from the proposal after criticism, largely from groups on the right, that his administration was seeking to raise taxes on the middle-class.