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ACR-47 529 College Savings Day.(2015-2016)

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ACR47:v96#DOCUMENT

Assembly Concurrent Resolution No. 47
CHAPTER 51

Relative to 529 College Savings Day.

[ Filed with Secretary of State  June 02, 2015. ]

LEGISLATIVE COUNSEL'S DIGEST


ACR 47, Chau. 529 College Savings Day.
This measure would designate May 29, 2015, as 529 College Savings Day, to raise awareness about the importance of saving for college with the help of 529 college savings plans.
Fiscal Committee: NO  

WHEREAS, 529 college savings plans are important tools for California families that want to save for their children’s college education, offering a diverse range of investment options, tax-deferred growth, and withdrawals free of state and federal taxes when those withdrawals are used for qualified higher education expenses such as tuition, fees, books, certain room and board costs, and required supplies; and
WHEREAS, While the first college savings plans were developed by states in 1988 as innovative programs designed to help families and students save for higher education expenses, it was not until the enactment of Section 529 of the Internal Revenue Code by Congress in 1996 that college savings plans began to rapidly gain popularity across the country; and
WHEREAS, Today, 49 states and the District of Columbia offer 529 college savings plans, nearly 12 million 529 accounts have been opened, more than $244 billion have been saved for future higher education expenses, and more than one million students nationwide have withdrawn funds from 529 accounts to help pay higher education expenses; and
WHEREAS, The ScholarShare College Savings Plan, which has served as California’s official state-sponsored 529 college savings plan since its launch in 1999, has grown to more than $6.3 billion in total plan assets held in over 260,000 ScholarShare accounts; and
WHEREAS, The ScholarShare College Savings Plan has helped students meet their higher education goals with nearly $300 million withdrawn annually for qualified higher education expenses at over 958 colleges and universities; and
WHEREAS, In California, over the past 10 years, tuition rates at the University of California, the California State University, and the California Community Colleges have increased 114 percent, 117 percent, and 130 percent, respectively, and over the past 40 years, tuition rates have consistently increased at two to three times the rate of inflation every year; and
WHEREAS, Federal financial aid awards have shifted away from student grants to providing access to guaranteed student loans so that, today, nearly 60 percent of all federal financial aid is in the form of loans, substantially increasing the number of college graduates who will face the burden of repaying significant student loan debt upon entering the workforce; and
WHEREAS, State support for public colleges and universities has fallen over the past decade, primarily due to the economic recession and budgetary shortfalls, and, as a result, public colleges and universities now receive more funding from student tuition than from direct state support, according to a 2014 Government Accountability Office study; and
WHEREAS, According to the Federal Reserve Bank of New York, student loan debt has now reached $1.16 trillion nationally, which is more than triple the amount owed in 2005; and
WHEREAS, When Americans are burdened with student loan debt, they are not able to buy homes, cars, and other products that boost our economy; and
WHEREAS, College savings plans, such as the ScholarShare College Savings Plan, help families to limit or eliminate future student loan debt by helping them save for future higher education expenses; and
WHEREAS, The contributions families make today pay off in the form of an increased earning potential for their children in the future, with a college graduate earning an average of $1 million more than a high school graduate during his or her career according to the United States Census Bureau; and
WHEREAS, May 29th is recognized nationally as 529 College Savings Day to help raise awareness across the country of the importance of saving for college with the help of 529 college savings plans; now, therefore, be it
Resolved by the Assembly of the State of California, the Senate thereof concurring, That the Legislature of the State of California hereby proclaims May 29, 2015, as 529 College Savings Day; and be it further
Resolved, That the Chief Clerk of the Assembly transmit copies of this resolution to the author for appropriate distribution.