According to the Consumer Financial Protection Bureau, student loan debt across the country is more than $1 trillion. The 529 Savings Plan is changing and could make college expenses more manageable.
President Obama recently signed a bill making 529 plans more technological. Money from a tax-sheltered 529 college savings plan can be used to purchase a computer. Till now, college students had to prove that a computer was required by their school in order to justify the purchase.
Michele Swaner, marketing director for Utah Educational Savings Plan says the changes take the guessing out for families who wondered if a computer was an eligible expense.
“It’s something that’s been needed for some time and I think that congress recognized that people use computers all the time. Kids going off to college use computers," Swaner said. "It’s just, it’s the way our life is today.”
Another change to the 529 plans allows a sick student to redeposit withdrawals within 60 days without triggering a tax.
“Let’s say you got sick—let’s say unfortunately your child got mono which is so common on college campuses at times—they could go get back a refund from the school and then redeposit that money and there wouldn’t be any tax consequences," Swaner said. "So that certainly is helpful to families. I mean, we hope that will never happen, but sometimes unforeseen things do indeed happen.”
The deadline for contributions to Utah Education Savings Plan accounts for 2015 is December 31.