(April 13) – A bill by Rep. Brittany Pettersen and Rep. Dave Young to alter college savings accounts to greater benefit middle-class families passed the House Finance Committee on a 6-5 vote this afternoon. Currently, 529 college savings accounts disproportionately benefit the wealthy; HB16-1003 reorients the benefits of the tax deductions to help middle-class families save for college.
“The opportunity to send kids to college should be available to every family in Colorado, not just the wealthy,” said Rep. Pettersen, D-Lakewood. “The Middle Class College Savings Act is about helping the families in the donut hole: those who don’t qualify for financial aid but really struggle to save for college. Let’s strategize where we put our dollars and put it towards the families who need it most.”
“Education should level the playing field, but when a college degree is too expensive, middle-class families struggle to catch up,” said Rep. Young, D-Greeley. “Anything that encourages families to save for college will decrease student debt.”
Under the Middle Class College Savings Act, families making under $150,000 a year would get double the state income tax deduction or 200 percent, while families earning from $150,000 to under $250,000 would get a 150 percent deduction and families earning from $250,000 to $500,000 would get just a 15 percent state income tax deduction. Those making over $500,000 would no longer get a state income tax deduction.
The 6-4 vote sends the bill to the House floor for second reading.