An economic development bill released by the Joint Committee on Economic Development and Emerging Technologies today includes a measure to incentivize families to save for college.
The bill is the Committee’s redraft of an economic development bill filed by Governor Baker in January.
The college savings proposal would offer Massachusetts families a state tax deduction on contributions made to college savings plans, such as 529s, to incentivize saving for future college expenses.
College savings tax incentives are offered by the vast majority of income-tax states. Massachusetts is one of only eight income-tax states currently not offering this college-savings tool to the low and middle-income families that can benefit from it. According to a recent study, 72 percent of households nationwide participating in 529 savings programs make less than $150,000 a year. A recent MassInsight survey, conducted by Opinion Dynamics, demonstrated that 76 percent of Massachusetts respondents would support a tax deduction for contributions to college savings plans.
Following the bill’s unveiling by the Joint Committee on Economic Development and Emerging Technologies, AICUM president Richard Doherty released the below statement:
“We are thrilled that Chairwoman Eileen Donoghue, Chairman Joseph Wagner and their colleagues on the Joint Committee on Economic Development and Emerging Technologies are promoting this proven college savings incentive. As a state known for the quality of its higher education, Massachusetts should be leading the way when it comes to college affordability and the college savings tools that we offer our low and middle-income families.
Not only are college savings tax incentives the right thing to do for students and families, but the whole state benefits when students graduate with manageable student loans and are able to invest more of their post-college earnings back into the economy. The economic development impact of 529 college savings incentives are proven. They encourage families to start saving earlier and more often, and children are far more likely to attend college knowing that their family is saving for their college education. We applaud this effort to offer an important college savings tool to low and middle-income families, and we are hopeful that the proposal comes to fruition.”
The Association of Independent Colleges and Universities in Massachusetts (AICUM) was founded by independent college presidents and today comprises 58 degree-granting, accredited independent colleges and universities in the Commonwealth. It is the leading voice on public policy matters affecting independent colleges and universities in Massachusetts. AICUM plays a critical role in advocating for college affordability, including state and federal funding for need-based student financial aid, federal research support and addressing state and Federal legislative and regulatory issues.