While on its face the expiration or rollback of tax benefits may sound like prudent fiscal policy, but Congress would be well advised to study the consequences of its actions, or - in the case of the sunset provisions - inaction. The failure to extend an attractive tax benefit of state-sponsored 529 education savings programs, such as the Kansas Learning Quest program, will affect millions of parents, grandparents and students attempting to set aside money for college, a noble goal that should be encouraged and rewarded by government rather than thwarted.

When the 2001 Economic Growth and Tax Relief Reconciliation Act was being considered by Congress, concerns about its potential impact on the budget resulted in a multi-year approach to its roll out and the creation of back-end expiration dates on various components of the tax plan. With the Tax Relief Act becoming law in 2002, participants in 529 college saving plans gained the ability to make earnings withdrawals free from federal taxes as long as the money was used for qualified education expenses. This new perk was in addition to the already-present benefit of tax-deferred earnings growth at the federal level and possible in-state tax incentives, a common feature of many state-sponsored plans, including Learning Quest.

While federal tax-deferral and in-state deductions are compelling reasons to invest in 529 plans, the recently acquired tax-free withdrawal feature is clearly the icing on the cake. It enables college savers to direct the bulk of their 529 account earnings to covering college costs rather than onerous tax bills. But unless Congress makes this particular tax benefit permanent, investors extracting plan assets after December 31, 2010 will end up paying Uncle Sam before they write a check for their dorm deposit.

The good news is that some legislators, recognizing the importance of higher education and the challenges college savers face, are taking steps to extend or make permanent 529 tax benefits. President Bush's fiscal 2005 budget proposal contains a provision to eliminate the 2010 sunset. In early February, Iowa Sen. Chuck Grassley introduced a series of bills that would effectively remove the sunset clause from the tax code. Also, back in 2002, a majority of the members of the House of Representatives gave a "yes" vote to a bill favoring permanent tax exclusion. Unfortunately, two-thirds support was needed for passage.

But while the politicians debate the issue, the general public clearly recognizes the importance of removing the barriers that make it difficult for families to save and invest for college. A new study by American Century Investments shows widespread support for extending the federal tax-free withdrawal feature of these plans. In a survey of more than 2,000 Americans, 76 percent of respondents want the tax benefits permanent. Not surprisingly, 81% of parents with children under 18, as well as 92% of those currently participating in a 529 program, support the extension. Even among parents with no children under the age of 18, 73% want the sunset provision removed. Furthermore, people across the political spectrum are like-minded on this issue. Democrats (75 percent), Republicans (80 percent) and Independents (77 percent) are overwhelmingly supportive of extending the tax benefits.

While some scoff that tax realities of 2010 are years away and families building an education nest egg shouldn't be overly concerned, the fact of the matter is saving for college is a multi-year goal in which decisions made today can have a tremendous impact on the future achievement of that goal. The difference between tax-free and taxable withdrawals can be the difference between covering college costs or coming up short at the point when the money is needed most.

Research suggests that the current legislative limbo in which 529 plans are now immersed is a source of angst for many families. According to the American Century study, almost half of the parents surveyed (47%) stated that the "uncertainty" of the federal tax treatment of withdrawals is a "major concern." Unless Congress acts to make the tax advantages permanent, my fear is that this uncertainty and concern will lead to inertia and create a crisis in college funding in 2010 and beyond. I would encourage you to contact Senator Roberts or Brownback, along with your Congressman, and ask them to support making the 529 tax benefits permanent.

Lynn Jenkins, CPA, is Treasurer for the State of Kansas and is responsible for the administration of the Learning Quest 529 Education Savings Program.