In 2001, a taxpayer could not contribute to an Education Savings Account
(formerly known as Education IRA) and 529 College Savings Plan within the same year.
Not wanting to waste what they perceived as a valuable opportunity to work with a like-minded Congress, groups such as the Christian Coalition and Focus on the Family developed a "wish list" of legislative priorities, including school vouchers, education savings accounts
for private school costs and even a constitutional amendment virtually erasing church-state separation from the Bill of Rights.
Monty Exter, a lobbyist for the Association of Texas Professional Educators, said education savings accounts
are worse than vouchers because there is no good way to control how parents spend the money.
com recommends investing in tax-deferred 529 college savings plan or Coverdell Education Savings Accounts
as a way for future college students to avoid the kiddie tax altogether.
In addition to the various education savings accounts
, parents should consider opening a high-yield savings or CD account while their child is still young.
An education savings account
would afford them a much different dynamic and approach to be able to get their education in the way that best works for them.
As originally written, Senate Bill 193 would have created an education savings account
program--known as ESAs--allowing nearly any family to take the state aid their local school district would have received to educate their child--a base amount a little over $3,000--and instead spend it on private schooling expenses.
Patrick promised the House an extra $530 million for public schools if the education savings account
program becomes law; he has been unsuccessfully advocating for similar voucher-like programs for the past decade.
31) This is how they work: If you are an eligible student, the state will take 90 percent of what it would have spent on your education and instead put it into an education savings account
that you own and control.
In an education savings account
, the money that the state would have spent on a child's public school education is placed in a bank account and the parents get to decide how to spend that money on behalf of their child's education.
org) or a Coverdell Education Savings Account
, both of which offer tax advantages if used for schooling.
Money saved in a Coverdell Education Savings Account
can be used to pay for all types of educational expenses--including grade school, secondary school and college--but the money has to be spent by the time the recipient turns 30 years old.