California Legislature—2015–16 Regular Session

Assembly Concurrent Resolution No. 47

Introduced by Assembly Member Chau

March 18, 2015

Assembly Concurrent Resolution No. 47—Relative to 529 College Savings Day.

LEGISLATIVE COUNSEL’S DIGEST

ACR 47, as introduced, 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nationwide have withdrawn funds from 529 accounts to help pay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withdrawn annually for qualified higher education expenses at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.