Deposit Restricted Qualified Tuition Programs Act Of 2009

Floor Speech

Deposit Restricted Qualified Tuition Programs Act Of 2009

BREAK IN TRANSCRIPT

* [Begin Insert]

Ms. JACKSON LEE of Texas. Mr. Speaker, today I rise in support of H.R. 4178--The Deposit Restricted Qualified Tuition Programs Act. As co-chair of the Congressional Children's Caucus, I support this legislation because I believe that it is an important measure to help families pay for higher education. A quality education continues to be the best pathway to social and economic mobility in this country, and this legislation will enable such paths. I want to thank my colleague, Emanuel Cleaver, for introducing this important legislation.

Today, Americans are simultaneously faced with rising higher education costs and a difficult economy. Families across Texas are sending their children to college and when they graduate, they should not be saddled with debt. Democrats pledged to make a college education more affordable, and this legislation makes good on our promise. This legislation is evidence that the Democratic-led Congress is committed to working on a bipartisan basis, and with this President, to address the key concerns of America's families.

During these tough economic times, many Americans saving for college saw their accounts drop over 50 percent in value and are now reluctant to invest in a securities-based plan. During the past year, many parents who contributed to a 529 college savings plan--an investment vehicle where earnings grow tax free--saw those savings take a hit. Many 529 plans were heavily invested in stocks, though their beneficiaries were just a few years away from attending college. This is a big blow to the 63 percent of parents who are saving for college expenses, according to a September 2009 Fidelity survey, and who must now manage a wide array of expenses with less money and security.

H.R. 4178 establishes an avenue for those wanting to save for the college education of a child, grandchild or other related individual, in a Federal Deposit Insurance Corporation, FDIC, insured deposit. Today, savers can only access the 529 college savings program through a securities-based plan, and this plan would offer another option. H.R. 4178 amends the Federal Deposit Insurance Act to prescribe requirements for deposit restricted qualified tuition programs which are exempt from Federal income tax. It also declares that in no event shall a deposit restricted qualified tuition program, the State entity designated by statute to oversee such program, or the administrator appointed to operate it on behalf of the State or a participating depository institution, be deemed to be an issuer of a security or an investment company. This bill does not make any changes to the current 529 college savings program nor the current delivery system of the program through a securities based plan. It simply adds another 529 college savings program delivery option through an FDIC insured deposit.

The Congressional Budget Office and the Joint Committee on Tax have completed a review of the budgetary impact of H.R. 4178, the Deposit Restricted Qualified Tuition Programs Act of 2009. They determined that by enacting this legislation it would affect revenues, but estimate that the reduction in revenues would not be significant over the 2010-2020 period. Similarly, implementing the bill could affect direct spending but the net impact of such spending would be negligible over the next 10 years.

* [End Insert]

BREAK IN TRANSCRIPT

Source