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Panel votes to expand college accounts

WASHINGTON — A Senate panel passed a bill Wednesday that would expand popular tax-free college savings accounts that President Barack Obama failed to scale back.

The Senate Finance Committee voted 26-0 to send the bill to the full Senate. The bill would let students use money from college savings accounts to buy computers and other technology, something they cannot do now with tax-free distributions from the accounts.

The House passed an identical bill in February by a vote of 401-20.

“The additions give more flexibility for using the tax-free savings. The more flexibility, the more people use something like this,” said Sen. Chuck Grassley, R-Iowa, who sponsored the bill. “The bill also sends the message to families that Congress supports this program and will fight efforts to get rid of it.”

About 12 million families take advantage of the 529 college savings plans, named after a section in federal tax law.

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