WASHINGTON, DC – Congressman Robert Hurt (R-Virginia) and Congressman John Delaney (D-Maryland) have introduced H.R. 3029, the College Savings Enhancement Act, which would update current securities laws to allow state-run prepaid college savings plans the freedom to invest more broadly, enhancing their ability to meet their obligations to the families purchasing their plans.
"I am proud to introduce this bill along with my colleague, Rep. Delaney," said Congressman Hurt. "This bipartisan legislation provides a commonsense update to our securities laws, allowing families who invest in these prepaid college savings plans to get the most return on their investments. Virginia, along with several other states throughout the country, offers these plans, which are excellent avenues for hardworking families to plan for the costs of their children's higher education over time. I look forward to doing all I can to ensure this bill moves forward so that prepaid college savings plans like the Virginia 529 Plan are able to best serve families investing in their children's futures," Hurt continued.
Congressman Delaney added, "Making college more affordable is imperative to keeping the American Dream in reach for all Americans. 529 Plans are an important part of the equation for many families, including those in Maryland. I'm proud to join Congressman Hurt on the bipartisan College Savings Enhancement Act, which strengthens 529 programs around the country. Making higher education more affordable and accessible isn't just the right thing to do; in a global economy, it's the smart thing to do. Training a high-skill workforce is critical to making our economy more competitive, and Republicans, Democrats, and Independents understand that education leads to better jobs."
Currently, prepaid college savings programs, which allow families to prepay future tuition and fees at public colleges or universities within the state the plans are offered, are not considered Qualified Institutional Buyers (QIBs) or Accredited Investors (AIs) under federal securities laws. This restricts them from investing in ways to maximize returns and meet the obligations to those who participate in their plans. Similar entities, however, such as state-run employee pension funds, are included in the definitions for these rules.
The College Savings Enhancement Act permits these prepaid college savings plans to come under these rules and allow them, like state pension funds, to invest in a wider portfolio and better meet their obligations to the families investing for their children's education.