Colorado lawmakers are debating a bill that would increase the tax deduction for contributions made to 529 college savings accounts made by families making under $250,000 a year.
According to supporters, under Colorado's current law:
- Those making more than $100K benefit from close to 90 percent of 529 deductions
- Nearly 50 percent of the 529 deduction goes to families making $250K per year or more
- Nearly a quarter of all 529 deduction benefits go to the top 1 percent of earners, those making more than $500K per year
- Less than 4 percent of the 529 deduction goes to families making median income or below
- Studies show that 13 out of 14 students whose families received tax breaks on tuition would have gone to college anyway
About 56 percent of Colorado students leave college with debt, averaging about $25,064 per student. That number has increased by more than 50 percent in the past 10 years, while the cost of a college education has jumped 26 percent.
While the deduction would double for families making $100,000 or less and increase by half for families that make between $100,000 and $250,000, the deduction would be significantly cut for families that make more than $250,000.
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