Friday, July 26, 2013

Something's Missing

I had a chance to review Senator Tammy Baldwin's speech from the floor of the Senate on the student loan bill this week  In her allotted ten minutes, the Senator listed various government programs--the GI Bill, the Stafford Loan Program, Pell Grants and Federally Guaranteed Student Loans--that are available to college students.  But nowhere in that ten minutes does Baldwin make any reference at all to saving money to pay for college. 

Thinking that perhaps she had skipped over that section to stay within the time limit for debate, I checked the text of the original speech sent to us by Baldwin's office.  But again, no mention of parents and students putting away cash or taking on extra jobs to pay for education.  If the Senator was going to take a Government-centric view of paying for higher education, she could have at least promoted Tax Code Section 529--which allowed states to set up College Savings Plans for parents--where contributions are allowed to grow tax-free while invested in relatively conservative funds.  You can even arrange to have the money automatically withdrawn from your checking account each month to save you the "hassle" of having to send in a check.

The Senator could have also mentioned the Lifelong Learning or the American Opportunity Tax Credits--which allow students or parents to directly subtract a portion of the tuition expenses from their federal income tax bills.  That credit is almost always larger than a student loan interest deduction that those who choose to borrow for their educations take on their returns.  One would think that if Senator Baldwin and her Democratic colleagues were so worried about the "indebtedness" that college graduates and parent face, they would do all they can to help those people limit the amount that those people have to borrow.

They could start by increasing the tuition tax credit.  Follow that by increase contribution limits on 529-plans--or make the money going in tax-deductible.  And since the Federal Government will be spending in excess of 600-MILLION DOLLARS to remind people that is now the law to have health insurance under ObamaCare--maybe Uncle Sam could use a couple mill to also remind people that YOUR SON OR DAUGHTER WILL LIKELY WANT TO GO TO COLLEGE.  YOU HAVE 18-YEARS TO PLAN FOR THAT, WE SUGGEST YOU START SAVING MONEY TODAY!!

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