President Obama said Friday that he abandoned a proposal to eliminate a popular college-savings plan because “it wasn’t worth it” and too many families objected to his plan.
While promoting his education agenda at a community college in Indianapolis, Mr. Obama encountered questions from a woman in the audience who said she paid for her daughter’s education with the so-called “529” plan and was now using it to save for her grandchildren’s tuition. She asked if the president still planned to kill the savings plan.
Mr. Obama, who pulled the proposal two weeks ago in the face of heated GOP opposition to raising taxes on the middle class, said he had learned his lesson.
“I’ll be honest with you, there were enough people who were already utilizing 529s that they started feeling as if, ‘Well you know changing like this in midstream, even if I’m not affected right now, I like the program,’” Mr. Obama said. “It wasn’t worth it for us to eliminate it. The savings [to the government] weren’t that great. So we actually, based on response, changed our mind.”
The president acknowledged that he and wife Michelle are using 529 plans to save for their daughters’ college educations.
“The folks who used them most were folks who were a little more on the high [income] end,” Mr. Obama said. “A lot of people couldn’t use them because they just weren’t generating enough savings to take advantage of the benefit. Our thinking was you could save money by eliminating the 529 and shifting it into some other loan programs that would be more broadly based.”
The president also fielded a question from a student who wondered if Mr. Obama’s plan to provide “free” tuition to community college students would cheapen the value of their degree.
“Absolutely not,” Mr. Obama said. “Don’t think paying more is better. Paying less is better. I’m always looking for a deal.”
The president promoted his economic agenda Friday at Ivy Tech Community College, where the institution’s president is fighting Obamacare’s employer mandate, saying it will cost the school system millions of dollars.
“My budget makes two years of community college free for every responsible student,” Mr. Obama said. “We want to make our community colleges even better, even more responsive to what’s going on in the marketplace.”
But the university system’s president, Thomas Snyder, has spoken out against Obamacare’s employer mandate. Mr. Snyder is supporting Sen. Joe Donnelly, Indiana Democrat, in his push to change Obamacare’s definition of the work week from 30 hours to 40 hours.
“Part of our strategy to keep tuition affordable is to have 50 percent of our classroom time taught by adjunct professors,” Mr. Snyder said in Washington last month. “The Affordable Care Act has caused us to reassess our ability to do that. We have to use the 30-hour rule, and what it means is that we have to count prep time. And if we don’t do this, we’re facing a $10-to-12 million health care bill.”
Mr. Obama said the U.S. “can actually afford to pay for all of” his proposals by raising taxes, or as he put it, eliminating “kickbacks for folks who don’t need them.”
The president’s budget, introduced on Monday, calls for a one-time 14-percent tax on corporations’ overseas profits, raising the top capital gains tax rate and closing a tax loophole on trust funds.
“America is poised for another good year … as long as Washington works to keep that progress going,” Mr. Obama said.