STATEHOUSE (March 8, 2017) — The House Committee on Education this week advanced a bill sponsored by State Rep. Holli Sullivan (R-Evansville) that would prevent funds saved in a 529 education savings account from being considered as a determining factor when applying for public assistance programs or educational financial aid.
“Indiana’s CollegeChoice 529 plans are a great way to start investing early in a child’s future,” Sullivan said. “However, as of now, 529 savings can be considered an asset that can negatively impact financial assistance eligibility for the account beneficiary who may need additional aid.”
In 1997, Indiana launched its CollegeChoice 529 plan as a means to help families save funds for future post-secondary and higher education expenses. Sullivan said by ensuring that a student’s financial aid eligibility would not be impacted by their 529 savings account, more Hoosiers may be inclined to participate.
“Senate Bill 412 helps remove barriers that might cause some to give pause before they save for education with our state’s affordable, tax-advantaged CollegeChoice 529 Plans,” said Troy Montigney, executive director of the Indiana Education Savings Authority. “In clarifying that CollegeChoice 529 account balances cannot negatively affect eligibility for state financial aid and other critical benefits, we can help make the program even more accessible to Hoosiers of all income levels.”
Withdrawals from a 529 savings account are tax-free and can be used to cover the costs of a number of qualified expenses such as books, computers, tuition and room and board at any post-high school educational institution that is able to receive federal financial aid nationwide. This would ensure that the opportunities available to Hoosier students will not be limited for any reason.
“This is a simple change that could incentivize more Hoosiers to take advantage of the resources available to them and benefit children all over the state,” Sullivan said.
The bill now moves to the House floor for further consideration. For more information, visit iga.in.gov.