Coverdell’s namesake education program axed in GOP tax bill

Late U.S. Sen. Paul Coverdell, R-Ga, in 1997. (Cox Staff Photo/Rick McKay/Washington Bureau)

WASHINGTON — The namesake federal program of late Georgia U.S. Sen. Paul Coverdell would effectively end if the House GOP’s new tax plan becomes law.

The legislation, dubbed the Tax Cuts and Jobs Act, would phase out what are known as Coverdell education savings accounts, part of an overall consolidation of education savings programs.

Created as part of the 2000 Bush tax cuts — and named in honor of the Republican lawmaker shortly after his sudden death — the program allows families to save up to $2,000 annually in after-tax dollars per child in a tax-protected savings account. The money can go to tuition at private, public or religious K-12 schools and colleges or other education expenses such as tutoring or books.

The new Republican tax bill would end all future contributions to the Coverdell savings accounts and instead expand the contribution limits to similar 529 college savings plans and allow them to include K-12 money.

“Today’s broken tax code contains roughly a dozen tax benefits related to education, each with their own rules, requirements, and calculations,” a summary of the Republican tax bill states. “Strengthening and streamlining tax benefits for higher education will help families save for and better afford tuition and education expenses.”

The Coverdell savings accounts were controversial from the beginning. While in the Senate, Coverdell managed to get them through the chamber twice, only to have them vetoed by President Bill Clinton. Opponents argued they would hurt public schools and mainly benefit the wealthy, who could afford to put their children in private schools. Supporters said it would help incentivize school choice.

Read more AJC coverage of the GOP tax bill: 

Backers of Georgia’s Vogtle nuclear project are big winners in tax plan

GOP plan would tax private college endowments

Bulldogs would no longer be a charity case under new GOP tax plan

Reader Comments 0

3 comments
Habrams01
Habrams01

"named in honor of the Republican lawmaker shortly after his sudden death ", so the relation to Coverdale was not due to his legislation.  As noted below, there is adequate replacement concepts for this change.  What is so sacrosanct about this single item?  The overall tax plan, to simplify, modily and condense the bloated tax code, has to start.  Are sacred and not so sacred cows to be left untouched?

RufusATL
RufusATL

Trump's not thru with our pocketbooks--we "ain't seen nut'n yet."

THWG
THWG

The plan would expand 529s to allow K-12 money...this tax plan kills a lot of the existing tax code, leaving room for complaints galore, but it also creates a much more simplified (though admittedly not very simple) structure.

Why have Coverdell accounts and 529s if you can allow one do to everything each did before on its own? 

Efficiency at work...

It'll never pass...Congress is much too immature to do anything that  makes sense.