Before Congress adjourned for Memorial Day weekend, Sen. Ted Cruz objected to a new retirement saving bill passed by the House because it left out one important reform.
The Texas Republican is standing up for expanded access to personal savings options for family education choice.
In 2017, college savings plans, or “529s,” were modified to allow parents to use money in those accounts for K-12 expenses.
Cruz’s Student Empowerment Act would build on those good reforms by allowing the money saved to go toward home schooling, apprenticeships, student loan expenses, and education support for students with disabilities.
Named after their section of the Internal Revenue Code, 529 college and K-12 savings accounts allow family members to save and invest after-tax income for future expenses.
Unlike most other forms of savings that get taxed once when the income is first earned, and then again when the savings are spent, any earnings on investments in 529s are tax-free.
Expanding the uses of 529 accounts help parents and students pay for education options outside the traditional school system, giving Americans more choice in their education.
For parents who still want to save and accrue tax-free earnings until college, nothing changes. It’s just more choice for those who want it.
Read the full story from The Daily Signal
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