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Treasurer touts savings plan; Wants funds for college to be tax deductible

(Delaware State News)By Kate House-Layton, Delaware State News

DOVER — Standing against a backdrop of youngsters, state Treasurer Jack Markell talked Monday about a program that could help them and future generations in Delaware go to college.

At a press conference at Delaware State University’s child development lab in Dover, Mr. Markell, chairman of the Delaware College Investment Plan, called for the state legislature to pass laws that would make contributions to state college savings accounts tax deductible.

The federal government recently voted to permanently keep college investment plan contributions free of federal tax.

“Now that there is that certainty, I think the timing is right for Delaware to make contributions tax deductible,” Mr. Markell said.

Delaware, he said, is one of 10 states that does not have tax deductibility for the program.

“As I talk to families in all three counties, it’s so clear that people are stretched,” Mr. Markell said.

“They’re stretched by higher energy prices, they’re stretched by health care prices and this is something that I believe we can do to help families invest in their own children’s future.”

Delaware’s nearly decade-old College Investment Plan, handled through Fidelity Investments, is a 529-savings plan, named for a section of the federal tax code that allows parents and guardians to set up investment accounts for college expenses.

Money in the investment portfolio grows or declines according to the stock market, Mr. Markell said.

There also is a money market option.

Don Henry, DSU’s vice president of business and finance, emphasized the need for more college savings programs.

Although Delaware State tries to be affordable, nearly 85 percent of its students receive financial aid, he said.

Financial troubles can interrupt or finish a student’s academic career, Mr. Henry said, and college loans are difficult to repay.

“We do our best at the university, but we’re stretching our resources as far as we can and even doing that, many worthy students go without,” Mr. Henry said. “We turn them away.”

DSU seniors Katrina Ositelu and Tisha Stewart know the college financial struggles all too well.

Both had to drop out of DSU for a while to find the funds to return.

Despite scholarships, grants and jobs, both women will graduate with about $30,000 of college debt.

Both said that a tax deductible savings program could have helped them if it existed when they were younger.

Ms. Stewart said students can focus more on their studies if they don’t have to worry about paying for their education, making it important for families to start investing early in their child’s education, even if it’s a little at a time.

“I don’t even care if it’s $1 a week,” Ms. Stewart said.

Mr. Markell’s election opponent, Republican Esthelda R. Parker-Selby, said she alsoo supports tax deductions.

“Anything to save taxpayers money,” she said.

The Republican candidate, however, questioned Mr. Markell’s timing with Election Day drawing near.

“The concept is way too long overdue to make it attractive to average people,” she said.