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Federal Legislation
March 4, 2015

S. 306 —"Enhancing Education Opportunities for All Students Act"

Summary:
S. 306 would allow all homeschool expenses to be considered “qualified education expenses” for Coverdell Educational Savings Accounts (ESA’s). This bill applies to all homeschools that operate under applicable State law, and categorizes them as private schools for the purpose of ESA funding.

Status:
Introduced (1/29/2015)

Sponsor:
Sen. Mike Lee (UT)

Bill Summary and Status S. 306

HSLDA’s Position:
Support

Background:
A Coverdell ESA is an investment tool for parents seeking to save money for their children’s education related expenses, such as tuition, books, and supplies. This type of account is advantageous because its interest and distributions (withdrawals) are tax-free.

Unlike various government voucher programs, Coverdell ESAs are personal savings accounts that do not use government funds. Instead, a Coverdell operates analogous to a Roth IRA. That is, after-tax money is placed by an individual in their own account, where the money can grow, collect interest, and be withdrawn for eligible education expenses without additional taxes being paid.

The Coverdell ESA can be used to pay for a child’s eligible education expenses. Currently, eligible expenses only include public and private school expenses. This means that only homeschool students in states which define a homeschool a private school can use the Coverdell ESA for educational expenses.

S. 306 would open Coverdell ESA accounts to homeschool families by including homeschool expenses as an eligible educational expense.

 Other Resources

HSLDA Policy Paper: “Homeschools and Education Savings Accounts”

S. 306 FAQs

Visit HSLDA’s website on Education Savings Accounts.

IRS Information on Coverdell Accounts.

HSLDA’s letter to Senator Crapo

HSLDA’s letter to Senator Cruz

HSLDA’s letter to Senator Lee