Rep. Ann Marie Buerkle, R-N.Y., introduced legislation that would extend the 529 college savings plan to elementary and secondary-education expenses. At this time the I.R.S. code says that 529 plan money can only be spent on expenses for higher education. The bill designation is HR 5932.
With tax reform on the table in Washington, the 529 plans could be included in a broader tax reform. Also there is talk of the widening of covered expenses covered under the 529 plan, like making computers and other technology an eligible 529 plan expense.
529 college savings plans allow parents to save for college and the growth be tax free. At this time there are over $158 billion dollars in 10 million state 529 plans.
The possibility of this legislation passing is a possibility because in 2002 Coverdell education plans were allowed to expand there savings accounts to include K-12 education expenses.
Is this a good idea?
Any legislation that encourages saving is good legislation. We have a serious lack of saving for the future in this country. There is also a lack of necesary funds for students in elementary education. Putting more in savings accounts to educate children would not only help the children but also the economy.