Bill to Update College Savings Plan Passes House
Mike Seals - March 4, 2021 12:21 am
OKLAHOMA CITY – A bill that updates allowable uses for qualified higher education expenses under the Oklahoma 529 College Savings Plan passed the House on Tuesday with a vote of 95-0.
House Bill 1962, authored by Jadine Nollan, R-Sand Springs, aligns the state’s language with the federal government’s definition.
“Oklahoma’s college savings plan already is terrific,” Nollan said. “But we want to make sure Oklahoma students have the same opportunities as students in other states when it comes to how they are allowed to use this money.”
Nollan said the bill was a request bill by State Treasurer Randy McDaniel, a former House member. She explained that the federal government expanded the definition of allowable uses under Section 529 of the Federal Tax Code over the past few years. With the passage of this bill, Oklahoma’s definition of qualified higher education expenses will align with the federal definition. Funds currently can be used for tuition, supplies, and room and board at accredited colleges, universities, career technology centers, and business schools.
McDaniel explained that the federal government has made important adjustments regarding the allowable uses for college saving plans. He said his efforts in working with Nollan were to keep the state current with those changes. Among the newest provisions, he highlighted the fact that 529 funds now can be used for apprenticeships and for student loan debt up to $10,000.
“The recommended changes help ensure the lasting success of a program focused on increasing the number of college graduates, while reducing burdensome student debt,” McDaniel said. “I encourage families to invest in their children’s future education and prosperity by contributing to the Oklahoma College Savings Plan.”
Oklahoma’s 529 College Savings Plan just celebrated its 20-year anniversary and both Nollan and McDaniel are excited about its future. The plan, which was started from scratch, now boasts over $1 billion in assets. The initial contribution amount recently was reduced to just $25, making it even easier for parents or guardians to save for their child’s college education.
HB 1962 now advances to the state Senate where it is authored by Sen. Marty Quinn, R-Claremore.