Thomas E. Petri: “2 years ago we approved legislation which allows parents to put aside $500 each year in education savings accounts…”

“2 years ago we approved legislation which allows parents to put aside $500 each year in education savings accounts, where the money can be invested in order to grow tax free and where it can be added to each year so that it can grow enough to help pay for college tuition. Ever since we managed to get education savings accounts enacted into law, we have been trying to raise the amounts parents are allowed to put into their children's accounts each year. We have been trying to extend education savings accounts so that parents, grandparents, or other interested parties will be able to use them to prepare for private or parochial, elementary or high school expenses. If a family were able to put $2,000 in an education savings accounts every year, from the time a child was born, and if the account averaged 7 rac{1}{2} percent interest annually, it would hold $14,500 by the time the child got to 1st grade. If nothing were withdrawn and annual savings continued, that amount would rise to $46,500 when it was time for high school. President Clinton vetoed an extension of education savings accounts last September, but I am confident that most of us in the House think parents should be encouraged to save for their kids' futures and that is why we are going to try again.”