Education funds exemption proposed

The Health and Human Services Committee heard testimony Jan. 31 on a bill that would exempt education funds from asset limit tests for certain public benefit programs.

LB732, introduced by Omaha Sen. Rick Kolowski, would remove 529 savings plans, student scholarships and work-study income from asset limit tests for Medicaid, the state’s child care subsidy program and the Supplemental Nutritional Assistance Program (SNAP).

Kolowski said low-income families often must prioritize immediate well-being over long-term interests when considering whether to put aside money for education.

“LB732 is one way we can make college savings a more accessible option for our lowest income families,” he said.

Aubrey Mancuso of Voices for Children in Nebraska testified in support of the bill, saying the cost of higher education is increasing faster than incomes. The state’s current incentive of offering a tax deduction for college savings plans is not reaching families most in need of assistance in paying for higher education, she said.

Mancuso said research shows that students with an education savings plan are six times more likely to enroll in higher education than individuals in similar financial circumstances who lack a savings plan.

“Our economy needs educated workers,” Mancuso said.

Tip O’Neill of the Association of Independent Colleges and Universities in Nebraska also supported the bill. Removing enrollment barriers from low-income students is good public policy for Nebraska, he said.

“We know of the unmet financial need of students in this state and the great sacrifice that families have to make to enroll students in colleges and universities,” O’Neill said.

No opposition testimony was given and the committee took no immediate action on the bill.