Glen Cove – Assemblyman Charles D. Lavine announced that Governor Paterson signed a bill into law that eases restrictions to the New York State College Choice Tuition Savings Program, allowing relatives, employers and others to contribute to state-sponsored college savings accounts (Ch. 81 of 2008). The new law will allow program participants to quickly accrue more money in program accounts, thereby giving families better opportunities to meet college expenses.
“Saving for college is serious, and this new law is great news for New York families,” Assemblyman Lavine said. “With the rising cost of a college education, families need to start saving early, and under this new law they’ll be able to boost contributions to their college savings accounts.”
Since its inception in 1998, the New York State College Choice Tuition Savings Program has provided a flexible, low-cost way to save for college: contributions to accounts – called 529 accounts – are tax deductible for New York State residents who open an account, and withdrawals for qualified higher-education expenses are tax free. Until now, however, deposits could be made to accounts only by the person or persons who opened it. The state comptroller’s office, which administers the program, has reported frequent complaints over the years about third-party contribution restrictions. The new law brings New York State in line with more than 30 other states that have similar laws.
“Under the new law, grandparents, aunts and uncles, and any other interested party can make contributions to a specific 529 account to help their college-bound loved one get that much closer to realizing the dream of a college education,” Assemblyman Lavine said. “These generous family members and friends can feel confident knowing that their contributions are going to a safe place and toward a great cause – the education and opportunity for a brighter future for someone they love.”
The New York State College Choice Tuition Savings Program currently has approximately 600,000 accounts and has helped New Yorkers save $8.3 billion for college expenses. In the past five years, however, more than 20,000 checks, valued at $57 million, were rejected from program accounts because they were submitted by someone other than the account owner.
“This is a common-sense law – considering rising education costs and the importance of a secondary education in the global economy, it’s only right that we provide prospective students with every opportunity to save as much as possible before they head off for college,” Assemblyman Lavine said. “This new law will be an important tool in helping families manage education costs and may mitigate the staggering loans so many students find themselves saddled with after graduation.”