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State treasurer pushes college savings plan

By Adam Allington, KWMU

St. Louis, MO – There is a new legislative effort aimed at boosting participation in the state's college savings plan.

The program, called the "Legacy Initiative", would provide assistance and incentives to low-income Missouri families who put money into tax-deductible college savings accounts.

The impetus for the program came about when a recent change in law directed unclaimed insurance company dividends to the Missouri Treasury.

State Treasurer Sarah Steelman is advocating using those unclaimed funds to promote participation in the MOST program Missouri's tax-deductible college savings program.

"Because there was a change in law we're getting a little bit more money right now," says Steelman. "So we're proposing to set that money aside and use the interest at to fund these matching grants."

Dr. Michael Sherradan, a professor of Social Development at Washington University endorses the plan. He says the treasurer's plan would even the playing field between middle and upper class families.

"The reason this is a good idea is because we give tax benefits to 529 college savings plans but you have to be a high-earner to get the tax benefit," says Sherradan, "so now low-earners can also access that benefit."

The Legacy Bill has support in both chambers of the General Assembly.

If passed Steelman says the bill would free up some 2.5 million dollars in assistance available for families making under $40,000 per year.


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