By Betty Lochner
For The Herald
All $1.6 trillion of Americans’ student loan debt would be forgiven in six months: That’s how Bernie Sanders summed up his Senate proposal recently.
As with anything a presidential contender says these days, reaction to the news was mixed. Some cheered. Some rolled their eyes. Some patiently awaited a tweet from the @berniethoughts parody account.
I have no idea whether you “feel the Bern,” if you’re more of an Elizabeth Warren fan or if you prefer the more moderate approaches of Joe Biden. Perhaps you voted for President Trump and you’d like his contract renewed. Regardless, I hope we can agree on one thing: The student debt situation has gotten out of hand.
Americans of all political stripes are living under the weight of this $1.6 trillion problem. Forty-four million people have student debt that eats away at paychecks, limits opportunities and leads them to put off buying homes and having children. That includes the young adults who were told a college degree was their golden ticket to the American dream. It includes moms and dads who took out Parent PLUS Loans. Oh, and we can’t forget the people who went back to school after bearing the brunt of the recession.
What to do about the problem is where Americans disagree; and usually along party lines. That’s not always the case, though. The state of Washington is part of a bipartisan, 28-state campaign that is taking on the issue of student debt. The aim of this movement is to limit college debt for future generations by sharing an existing solution unfamiliar to 68 percent of Americans.
The tool is a 529 college savings plan. Parents who know about 529s are more likely to be saving for their son or daughter’s future. Even more compelling, children who know they have a 529 in their name are six times more likely to go to college, according to a Washington University study.
How do 529s work? You can make money by saving money, thanks to compound interest and tax incentives many states provide. The money you invest in a 529 grows tax-free and can be used at any accredited higher education institution. That includes four-year universities, community colleges, and technical and vocational schools. The 529 plans make saving for college doable for families of various means. Investing $10 a week in a 529 over 18 years can add up to around $15,000.
It’s safe to say Sanders’ plan is going to grab a few more headlines. It may give him a bump in the polls, too. Until it passes both houses of Congress and receives a presidential signature, however, it’s just an idea. An idea that, for now, has zero impact on you and the future college student in your life.
The 529 solution is real. Parents and grandparents can take matters into their own hands today to lessen what a child has to borrow tomorrow. It’s a solution that doesn’t depend upon 2020.
Regardless of who you’re voting for, that’s good news.
Betty Lochner is liason for the National 529 Campaign and former director of Washington 529 Plans.
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