Saving for College

 As the costs of higher education continue to soar, the affordability of a college degree continues to grow as a concern for students and their families. To help alleviate the hefty burden of college bills, students and parents increasingly have been drawing upon financial assistance from a variety of sources. A recent study by the General Accounting Office revealed that 60 percent of seniors who graduated from a four-year public college or university in the 1995-96 school year had borrowed money at some point during their educational pursuit, a figure that is up from 42 percent in the 1992-93 school year.

To help students meet rising college costs, I am cosponsoring legislation that takes a different approach to easing the sticker shock associated with higher education. This legislation would encourage saving for college by making state-sponsored savings plans entirely tax-free, provided that these monies are used for education. Under current tax law, distributions from these plans are partially counted when calculating a student's taxable income. Several states, including West Virginia, have established state-sponsored savings plans for higher education, and this legislation would help to make those programs more family friendly.

The West Virginia Prepaid College Plan, which was launched last October, is one example of the state-operated programs that have recently been established throughout the country to help families save for college. Like programs elsewhere, West Virginia's Prepaid College Plan enables families to save for college while receiving special tax benefits. It also allows the family to lock in today's tuition prices for the date when the child actually enters a West Virginia college or university. Additionally, the plan provides flexibility in the event the student chooses to attend a private institution or a college or university in another state. Details about this option are available at the West Virginia Prepaid College plan Internet site at www.wvtreasury.com or by calling 1-800-307-4701.

As a firm believer in the importance of education, I can think of few investments as worthwhile as those that can make the dream of a college education become a reality. Prepaid college savings plans provide one option for families to reduce the burden of the high costs of college, and I am glad to support a piece of legislation that can help to make such programs more economically advantageous.
_________________
March 24, 1999