529 expansion could offer options for education
Recent changes in federal tax law could open the door for Michigan families to use personal savings accounts that originally were designed for post-secondary education expenses for K-12 education, as well.
The Tax Cuts and Jobs Act passed in 2017 expanded the use of 529 savings plans so parents can now use these funds for up to $10,000 per year in qualified K-12 expenses, including private school tuition.
529 savings plans are designed to be tax-advantaged plans that help parents save for future college costs. The plans are sponsored by states, state agencies or educational institutions and are authorized by Section 529 of the Internal Revenue Code.
For a state like Michigan, where educational choice currently is confined to public and charter schools, expanding these plans to K-12 expenses presents an opening for those families who are financially able to set aside their personal funds for future costs.
Unfortunately, some elected officials in Michigan appear determined to continue restricting access to private schooling — even if parents are willing and able to invest their own money in their children’s education.
In the late 1800s, Michigan adopted a so-called Blaine amendment into its state constitution, making it impossible for families to utilize public funds at religious schools. The state continued to make changes to its Blaine Amendment even through the 1970s, making Michigan’s Blaine Amendment the most restrictive in America. These amendments are a sad reminder of a time in our nation’s history when vehement anti-Catholic sentiment dictated discriminatory public policy.
Many states have found a way to enact publicly funded private school choice programs despite Blaine restrictions; Michigan has been unable to do so, leaving thousands of families with limited K-12 options unless they are able to move to a different district or pay their own way.
That’s where the 529 expansion could be a small benefit for those families who are able to invest in a savings account for future K-12 expenses. For those who can’t afford to save, this program will have limited appeal, but over time, given some creative thinking, the 529 expansion could even be utilized to help low income families save for K-12 expenses.
Make no mistake, though, this is no substitute for real reform at the state level.
Our vision for educational choice means that every family, regardless of income or ZIP code, can access the schooling type that works for them. We don’t care what they choose; we just want them to have a true choice.
Michigan’s Blaine amendment means it will be impossible, at least in the short term, to expand educational options for all families. It would be an incredible disappointment if state officials apply that standard and say that it is wrong for parents and grandparents to use their own money to help students.
As states from coast to coast consider how to implement the federal 529 tax plan, we hope Michigan doesn’t wind up being an outlier — again — when it comes to empowering families to choose K-12 schooling options that work best for them.
The 529 expansion is by no means a panacea, but it’s a start in a state where families have been told for far too long that they don’t deserve a K-12 educational system with options for all.
Robert Enlow is president and CEO of EdChoice.
Fixing Michigan’s schools
This is part of a series of editorials and commentaries this school year exploring ideas for improving our state’s schools. Follow along at detroitnews.com/opinion.