Obama Doesn't Want You To Save For College - And Response (3)

  • Saturday, January 24, 2015

Over the past few decades, federal aid for post-secondary education has decreased and transitioned largely from grants to guaranteed student loans.  At the same time, the cost of college has far exceeded the cost of inflation creating a situation in which college has become less affordable and causing students to pile up debt that is at an all-time high.  This debt hurts our economy by causing new graduates to delay the purchase of homes and cars, even delay marriage and child birth. 

In the early 90’s many states created prepaid college tuition plans and college savings accounts that would allow parents to lock in the cost of college at the present rate.  The IRS under the Clinton administration attacked these plans and attempted to tax their post savings value.  In 1996 Democrat Senator Bob Graham and Republican Senator Mitch McConnell led a bi-partisan effort to create the 529 college savings plan.  Bill Clinton, after losing his congressional majority, shifted his governance from the far left to the middle becoming one of the most effective presidents of my life time, and signed the bill into law.

 Today, there are more than 12 million 529 and prepaid college savings accounts holding more than $240 billion in value.  People open these accounts and put their college savings into them in any denomination - $25 per month, maybe a $100 per quarter, or perhaps a portion of the annual bonus or annual tax refund.  The account grows and grows and when the child is ready to attend college, the money can be withdrawn tax free to pay for college and related expenses.  What a novel idea! People saving money of their own to pay for something of lasting and permanent value!  How American is that?!

 When I quit graduate school in 1984, I had nearly $15,000 of debt.  This was a huge burden to a new graduate making just over $14,000 per year.  I soon defaulted on the loan and it became a burden on my credit score even after I paid off the loan.  About three years after college, I remember wanting to quit my job and go back to school to get a degree in a different field of study.  The burden of that loan kept me from changing courses.  I didn’t want my children to have to be burdened with the same type of debt that could alter their decisions, their careers, and their futures.  So when we began having children, I would put away money in US Savings Bonds for their future college.  But the interest rates on US Savings Bonds are ridiculously low.  

 Shortly after the 529 plans were signed into law, I opened accounts for all three of my children.  My investment in the 529 college savings plans may have been the best investments I have ever made.  One of my children recently graduated from college and my two youngest are currently attending college.  I have used our 529 savings, the Hope Scholarship, UTC’s generous Brock Scholarship, and some other merit scholarships so that each child will graduate without any personal debt or dependence on the Federal government.

 But if Obama has his way, the 529 plan won’t be available for my grandchildren.  After the American people rejected his far left agenda and inflicted the largest midterm election loss in a century by giving the full Congress to the Republicans to govern, rather than moderate as President Clinton did, Obama arrogantly proposed in his State of the Union Address another far left agenda that would require higher taxes, more public spending, more public debt, less personal accountability on the part of Americans, and yes .

. . abolishing the tax free component of the 529 college savings plan.

 Thankfully, the Republican majority will not pass Obama’s nonsense.  But I am surprised I haven’t heard more outcry from people regarding Obama’s attack on traditional American values of savings and personal accountability and his plan to encumber us further with taxes and require future generations to depend even more on the federal government for their care, security and future.

Bob Linehart 

* * * 

The Obama Administration is looking at 529's and many other pools of capital simply because "that's where the money is," a la Willie Sutton. As your article points out, tuition costs and their concomitant debt, are already dealing punitive blow to our society and acting as a considerable drag on critical components of the economy.  

For a very enlightening look at the darker side of this debacle please reference, "Tuition Sorcerers" from the August 18 issue of Forbes magazine.  

Hutch Smith 

* * * 

Dear Mr. Linehart, 

Thank you for your inspiring message and willingness to take time to inform us of this latest component of Obama's leftist agenda. Like you, it's clear to me that President Obama holds a particular animosity towards our children and grandchildren. 

I was particularly impressed that you and your children, in a tribute to good ol'  personal responsibility and can-do Americanism, have wisely elected to take advantage of the Hope Scholarships. It's such a wise and forward thinking plan, with its transfer of money from the poor (through the sale of lottery tickets), who don't deserve an education, directly to our children and grandchildren who need that money so much more. What a way to build a country and insure that all Americans are prepared to compete in the global economy. 

Just as I'm sure you were, I was outraged when Obama issued his "You didn't build that" big lie during the 2012 presidential campaign. That's because I know, just as I'm certain you do, we did build it all on our own, and we don't need Obama, with his big government agenda, picking winners and losers. 

Lonnie Hatmaker 

* * * 

Mr. Linehart, 

Our President wants everyone to save for college and he was not advocating doing away with the 529 plans, just removing the tax exemption portion, as it was originally set up.  This is no different than IRAs and 401s.  

I too had student loans when I graduated college in the 80s, but I worked though it and paid them off as agreed. 

No conspiracy here. 

John Fricke

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