It's still deductible above the line. But phase out is low
by gregmorrissey (2024-02-25 17:07:52)

In reply to: Interest was deductible until the early 1980s. Vivid memory  posted by Moose84

Cannot Reply Return to Political

The interest deduction income phase out is comically low in my opinion.

Your daughter should look into PSLF and SAVE (or whatever they call the income based repayment plans now).

I do find it interesting how you look at it though. You call $12k a bail out. I'm interested to know how much capital gains tax was saved in the 529 plans. I'd guess it was significantly more than $60k (5 kids x $12,000). I'll admit I'm making the possibly wrong assumption that the full $700k was paid out of the 529. Also, depending on where you live, it's possible those 529 deductions saved you a decent amount of money in state income tax.

I'd be somewhat surprised if the full 700k was from 529
by jt  (2024-02-25 17:39:14)     cannot delete  |  Edit  |  Return to Board  |  Ignore Poster   |   Highlight Poster  |   Cannot reply

accounts.

That would be relatively impressive savings over a relatively short period of time, considering they weren't even around until 1996, and by 2000 there were only 30 states that had them. It really took the tax act of 2001 to get them off the ground and into the mainstream.

that said, anything is possible.
Agree, but tax savings likely still substantial
by gregmorrissey  (2024-02-25 18:06:26)     cannot delete  |  Edit  |  Return to Board  |  Ignore Poster   |   Highlight Poster  |   Cannot reply

I was just trying to point out it was a significant benefit received from a government policy decision, and I would assume Moose84 (similar to CATripleDomer below) would object if someone characterized it as a bail out.

In thinking about it a little more, $60k would require between $300k and $400k in gains which is unlikely so Moose84's net benefit of the 529 was likely less than $12k per kid, again depending on state tax impact.

I want to point out that it's an honorable thing that Moose84 did to sacrifice and save for his kids' tuition. He used the government programs available to him to as much benefit as possible which I encourage everyone to do. Just asking everyone to acknowledge the benefit and not describe benefits received by others using negative terms.

Thanks. And I am grateful for the 529 Plan program.
by Moose84  (2024-02-26 07:52:28)     cannot delete  |  Edit  |  Return to Board  |  Ignore Poster   |   Highlight Poster  |   Cannot reply

The tuition did not all come from 529. I had a unique situation 2010-2012 that allowed me to pay a year or two of kid 3's and 4's ND tuition out of cash flow while their 529s recovered and grew after the 2008 market meltdown.

Perhaps I was to strong in my wording saying "bail out." It just seems that policies change right at the wrong time for me. I am grateful I avoided parent loans or encumbering my house with new debt to accomplish the feat.

I said it before, I will say it again -- I am so glad to be out of that rat race!

@jt - I will e-mail you.

I don't know that I disagree with anything that you say
by jt  (2024-02-25 18:26:43)     cannot delete  |  Edit  |  Return to Board  |  Ignore Poster   |   Highlight Poster  |   Cannot reply

my concern is that this program, whether you call it a bailout or not, really doesn't solve the underlying issue(s).

It just reeks of politics as usual in this day and age.
I agree there too
by gregmorrissey  (2024-02-25 18:32:26)     cannot delete  |  Edit  |  Return to Board  |  Ignore Poster   |   Highlight Poster  |   Cannot reply

I wish they would solve the real problem or even make an attempt. I won't hold my breath. In the meantime, I'm not going to begrudge a government benefit that might actually go to a middle class recipient for a change after experiencing the actual bailouts over the last 15 years.