This is a significant distinction, because it allows students to withdraw the savings that accumulate in their pre-paid tuition accounts without paying any tax at all. That means more money for children's education. It also means that parents have the incentive to put money away today and their children have the full benefit of that money, without any tax, tomorrow. This means that most members of the Senate have parents and students back home who either benefit from this plan right now, or will benefit from this plan soon. I am pleased to point out that my home State of Delaware has acted in this area.
Delaware parents can now save for college on a tax-deferred basis.
If this bill becomes law, these Delaware families will be able to save for a child's college education on a tax-free basis. The prepaid provision also covers networks of private college plans. This will enable still more parents and students to save for college. This particular program is a time-tested and widely used benefit for working students. Over one million workers across America receive tax-free employer provided education.