Ohio Senate OKs tax breaks on college savings accounts

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COLUMBUS, Ohio (AP) — A proposal to increase state tax benefits on college savings accounts has cleared the Ohio Senate.

The bill passed Wednesday with bipartisan support.

It would increase the maximum income-tax deduction allowed for contributions to a 529 college savings plan from $2,000 to $10,000 for each beneficiary annually. The measure heads next to the House.

Proponents said average Ohio student loan debt in 2013 was $29,090, above the national average. They said increasing tax breaks would allow families to borrow less and save more.

The vote follows President Barack Obama's decision in January to drop a plan that would have scaled back 529 tax benefits at the federal level. Congressional members of both parties disapproved.

Over 640,000 Ohioans invest in 529 college savings plans, exceeding $9 billion in total contributions.

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