Education is the focus of two bipartisan bills I just introduced. One bill makes certain the needs of high ability students are included in federal education policy.
Federal education policy tends to overlook high potential students, especially those from underserved communities, including rural areas, or disadvantaged backgrounds. Often these kids aren’t challenged and might even drop out of school, when they could excel with the right encouragement. This bill would give attention to the students who are bright and capable but are in danger of falling through the cracks.
The legislation would include these students in the school, district, and state planning processes that exist already under the Elementary and Secondary Education Act. The bill would specify that educators address the special learning needs of various populations of students, including gifted and high ability learners. The measure also stipulates that existing teacher-quality grants would be used to help improve the achievement of all students, including gifted and talented students. This would help general education teachers and other school personnel better understand how to recognize and respond to the needs of high ability students.
Another newly introduced bipartisan bill would enhance the already successful Section 529 college savings plans. The legislation’s reforms would make it even more appealing for parents and grandparents to use these plans. The additions give more flexibility for using the tax-free savings. The bill also sends the message to families that Congress supports this program and will fight efforts to get rid of it.
The bill builds on improvements to 529 college savings plans enacted in 2001 and 2006 under my leadership on the Finance Committee and with broad bipartisan, bicameral support. The changes first made spending from the plans tax-free as long as the money was used for college and associated expenses and then made the tax-free provision permanent.
The new bill has three main provisions. The first provision recognizes the reality that in today’s world, a computer is just as much a necessary educational expense as a required class textbook. As such, this bill allows 529 funds to purchase a computer on the same tax-favorable basis as other required materials.
The second provision eliminates an outdated and unnecessary aggregation rule that increases paperwork and costs on plan administrators.
The third provision provides tax and penalty relief in instances where a student may have to withdraw from school for illness or other reasons. Under current law, any refunds from the college are subject to immediate taxation and a 10 percent tax penalty. This provision eliminates this tax and penalty if the refund is redeposited in a 529 account. This permits a family to set the refund aside to pay for the student’s education should he or she be able to return to college or to use it for another family member.
For College Savings Iowa, $17,878 is the average account balance, $133 is the average amount contributed via automatic payments, and $25 is the minimum to open an account or contribute.