INDIANAPOLIS — When Sen. Eric Koch, R-Bedford, sat down in December to make a contribution to his son’s education savings plan, he wondered how many Hoosiers desired to do the same for their children but lacked financial access or knowledge.
“I thought, ‘Imagine if there were ways that we could broaden access to these plans for a larger universe of people,’” he said, referring to the CollegeChoice 529 Direct Savings Plan — a long-term educational savings account.
That is why Koch introduced Senate Bill 412, which would allow low-income Hoosiers to save as much as they could without being penalized for their 529 savings when applying for means-tested public benefits, such as food stamps and Medicaid, or income-based state financial aid.
Troy Montigney, executive director of Indiana Education Savings Authority, testified in support of Koch’s legislation at a Tuesday Tax and Fiscal Policy meeting. Montigney and the Indiana Education Savings Authority oversee the 529.
Montigney said the 529 is tax-free, as long as the money is used for “qualified education expenses,” such as tuition, room and board and school supplies.
As 529 Direct Savings Plan turn 20 years old in Indiana this year, Hoosiers have invested more than $3.6 billion in more than 317,000 accounts.
The amended bill, Montigney said, complements what the Indiana Education Savings Authority is doing in order to make the savings plan more accessible to people across the state.
The Senate Tax and Fiscal Policy committee passed the bill, 14-0. Koch’s legislation will face the full Senate for further consideration.
“My hope is that more Hoosiers will now use this tool to save for their children’s future,” Koch said.
Shelby Mullis is a reporter for http://TheStatehouseFile.com, a news website powered by Franklin College journalism students.