Helping Families Save for Education Act

College costs have increased tremendously over the past decade. When adjusted for inflation, the average published price for in-State students at public 4-year universities is 34 percent higher than it was a decade ago and more than twice as high as it was 20 years ago. The price of private nonprofit 4-year institutions has increased 24 percent during the last 10 years and 51 percent during the last 20 years.

Federal financial aid for students has also increased rapidly but failed to mitigate the issues of rising college costs. Between the 2005–2006 academic year and the 2015–2016 academic year, the amount of Federal financial aid in the form of Pell Grants, Federal student aid, campus based aid, veterans educational benefits, and tax credits increased from $82.4 billion to $158.3 billion or by 92 percent. The Federal Government’s share of total student aid is 66 percent.

Students continue to borrow more than they can afford. During the 2014–2015 academic year, approximately 61 percent of students who earned bachelor’s degrees from public and private nonprofit institutions at which they began their studies graduated with debt. These students borrowed an average of $28,100, an increase of 8.9 percent compared to 5 years ago and an increase of 18.1 percent compared to 10 years ago.

Increase in age limitation of beneficiary after which contributions to account cannot be made— Section 530(b)(1)(A)(ii) of the Internal Revenue Code of 1986 is amended by striking “age 18” and inserting “age 22”.

Increase in annual dollar limitation on contributions to account— Section 530(b)(1)(A)(iii) of such Code is amended by striking “$2,000” and inserting “$10,000”.