Lawmakers Revive College Savings Plan Expansion

Expanding a special college savings account is among the issues lawmakers will take up when they meet for a special session Monday, as part of a bill that would, in part, make 529 savings plans available for K-12 school tuition.

Recent changes in federal law mean states can make 529 savings accounts – used to help pay for college – available to help pay for K-12 private school tuition as well.

State lawmakers considered a bill earlier this year to make that happen, and it died, but, the provision expanding the accounts for K-12 tuition is back, as part of a major tax bill lawmakers will vote on next week.

Rep. Ed DeLaney (D-Indianapolis) says its inclusion in the bill goes against earlier talks to look further into the issue.

“The committee in the House voted to take this subject of 529 accounts and send it to a summer study committee because it was so important," he says. "The Senate, separately, using the same bill number, took the same idea of study, made for a more elaborate study, and said 'in the meanwhile don't use 529 accounts for primary school and high school.'"

The 529 accounts provide tax credits to people who use them, up to $1,000 a year, and DeLaney says expanding them for K-12 could also mean a loss of more tax dollars for the state.

Another big problem DeLaney says, is the process for how the provision came back to life and will be considered in the special session.

“This should be debated and discussed. That’s why both the House and the Senate, when we were acting coherently and on a normal schedule, said ‘Hey, timeout, study this at length,’” he says.

Lawmakers won’t hear public comment or make amendments on any bills during Monday’s session.