GRAY INTRODUCES LEGISLATION TO INCREASE AFFORDABILITY OF COLLEGE AND POST-SECONDARY EDUCATION

“Saving money and investing in education is a value we should encourage.”

Washington, D.C. -- D.C. Councilmember Vincent C. Gray introduced legislation to expand affordability of college and qualified, post-secondary education by increasing the annual 529 Savings Plan tax deduction from $4,000 to $30,000.

Gray’s legislation, the “College Savings Plan Amendment Act of 2024,” is co-introduced by Councilmembers Matthew Frumin, Brianne Nadeau and Zachary Parker, and co-sponsored by Councilmember Christina Henderson.

The legislation amends District of Columbia Official Code to increase the annual tax deduction for contributions to 529 plans from $4,000 ($8,000 for married couples) to $30,000. The District’s current deduction ranks in the lower half of states. The legislation also codifies a lifetime limit of $500,000 in tax protected contributions.

Additionally, the bill mandates employers to provide an option for employees to voluntarily remit automatic paycheck deductions to their 529 college savings account, similar to payroll mechanisms used to fund 401(k) accounts.

As well, the legislation protects access to college savings plans for disabled residents by allowing them to contribute without the fear of losing their disability benefits. Money in qualified 529 funds will not be calculated as an asset that could disqualify some people from receiving benefits.

“As the cost of higher education continues to increase, families need to set aside more financial resources,” said D.C. Councilmember Vincent C. Gray. “Saving and investing wisely is a proven strategy for making college and other post-secondary education more affordable, but the District is unnecessarily limiting families and, indeed, trails other states in this regard. My legislation will allow families to better plan and prepare for the future. Saving money and investing in education is a value we should encourage.”

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