Not such a bad idea in my mind. Penalty free 401K withdrawals to pay for college.

https://www.foxnews.com/politics/rand-paul-bill-student-college-debt-loans

Always been a fan of his and his father. They tend to have solid, practical ideas/solutions on many issues.

Not a fan of Rand Paul though I have libertarian leanings. This is not a bad idea though it favors those with enough money to have a 401K and is not help to those who come from families with few resources. We somehow need to find a way for smart kids from low income families without much support from home to get as much education as they would like. Often they have more potential because they have led a life of having to overcome obstacles to achieve high academics.

As long as they pay the taxes on it, I like it.

I’m pretty certain that the military accepts smart kids from low income families without much support from home. While in the military, they are offered educational opportunities (community college of the Air Force, for example), and they can put a small amount of their monthly pay into the GI bill. Once discharged, they will have life skills, job skills, and their GI bill money, and can pursue a college degree without having to incur debt.

Or, we can elect people who want to make everything “free”. Great idea.

The elected one's want to make everything free to those that don't earn it.

Great answer-

Does this mean they would get rid of the income restrictions on IRA's, because that would be great and a better advantage than a 529 since it would lower your taxable income?

When we were young, I'm 64. The federal govt. supported the college and tuition was allot cheaper for the students.

Today the govt. spends money like water but supporting colleges or containing health care costs are not important to them.

Quickly we are evolving into a society of the "haves" and "have nots". Middle class is quickly disappearing.

The govt does support colleges by giving student loans for tuition. Colleges take advantage by increasing tuition knowing the govt will continue to give larger and larger loans, because if they don't students will cry they can't go to school. Everyone should have the opportunity to quality education, but as said in Caddyshack "the world needs ditch diggers too."

This came from wiki, it's a little lengthy but best I could find tonight:


Between 2007-08 and 2017–18, published in-state tuition and fees at public four-year institutions increased at an average rate of 3.2% per year beyond inflation, compared with 4.0% between 1987–88 and 1997–98 and 4.4% between 1997–98 and 2007-08.[8] One cause of increased tuition is the reduction of state and federal appropriations to state colleges, causing the institutions to shift the cost over to students in the form of higher tuition. State support for public colleges and universities has fallen by about 26 percent per full-time student since the early 1990s.[9] In 2011, for the first time, American public universities took in more revenue from tuition than state funding.[7][10] Critics say the shift from state support to tuition represents an effective privatization of public higher education.[10][11] About 80 percent of American college students attend public institutions.[9]

How many ppl have a decent size 401k and a meaningful amount of student loan debt at the same time?

It’s an end around to pay down college loans with untaxed money by both the loan holder and parents of the loan holder.

Loan payments should be untaxed, interest and all, no matter who is paying it down.

Gotcha

I have no issue with loan payments being untaxed

If you are poor and a high achiever you are going to have a great chance at a scholarship. If you are poor, a high achiever, and a minority, you are going to get showered with scholarships.

Here's the other thing about 401k money, almost all employers match your contribution up to a certain point. So you are getting tax free growth and matched funds to build up a war chest to pay down loans. Not terrible.