A new proposal by Sen. Rand Paul could affect Americans and their struggles to pay off college debt tremendously should it pass.
So What’s the Bill?
The general idea of Paul’s proposal is that Americans can use their 401(k) plans and pre tax savings to pay off college debt with pre tax dollars:
“What this would allow for is not only that you could use money that’s already in your IRA, it allows you to specifically put money in there. So let’s say you are already paying your student loans off or paying them with after-tax dollars. This would allow you to take that money, put it in the 401(k) and pay with pretax dollars,” Paul said.
The plan also makes college spending tax-free, which Paul estimates is a reduction in college’s price of between 20 and 30%. It also comes cost-free for the government, with Paul also touching a bit on some of the 2020 hopefuls proposed plans, in short calling them quite dreamy, as “there is no free lunch,” and to pay for those programs, you’d have “massive taxes on the working class and middle class.”
“Free college education, which isn’t really free, has no chance on Capitol Hill. This uses a standard form of retirement income, IRAs, everybody knows what they are, 401(k)s, and uses that vehicle and says, you know what? You can pay for college out of that,” Paul said, aiming to get Democrats behind the bill.
Should the bill pass, it could be great financially for many, but would it be for the treasury? The question is will lawmakers choose to support more for the people or more for the government?