Bill Overview
Title: Expanded Student Saver’s Tax Credit Act
Description: This bill revises the tax credit for retirement savings contributions to allow full-time students to qualify for such credit.
Sponsors: Rep. Allred, Colin Z. [D-TX-32]
Target Audience
Population: Full-time students globally
Estimated Size: 8000000
- The bill targets students, specifically those who are full-time.
- Currently, the Saver's Tax Credit is primarily available to working adults who contribute to a retirement savings plan.
- By allowing full-time students to qualify, it's expanding the potential beneficiaries significantly, accommodating those who might not be currently working or earning substantial income due to being in school full-time.
- Globally, the number of tertiary (university-level) students is significant, with millions enrolled in higher education institutions worldwide.
- The access to retirement savings benefits can provide an incentive for students to start early retirement savings plans.
Reasoning
- The Expanded Student Saver's Tax Credit Act is likely to have varying impacts on different segments of the student population.
- The policy primarily benefits full-time students, potentially having no immediate impact on those not enrolled full-time.
- Some students may not see immediate changes in their well-being but could perceive long-term benefits from increased savings.
- Students from low-income families may experience higher impact due to financial incentives for savings.
- The overall reach is limited by the budget of $1.6 billion annually, meaning not all 8 million full-time students could be significantly impacted each year.
Simulated Interviews
Full-time College Student (Chicago, IL)
Age: 20 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 4.0 years
Commonness: 15/20
Statement of Opinion:
- As a college student, every bit of savings helps, so this policy seems great.
- I worry about handling retirement savings now when I have student loans to think about.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 7 |
| Year 20 | 9 | 7 |
Full-time College Student (Austin, TX)
Age: 22 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 3.0 years
Commonness: 18/20
Statement of Opinion:
- I wasn't really saving for retirement, focused on paying for college.
- This policy might motivate me to start saving, but I'm not sure how much I can.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 8 | 6 |
Graduate Student (Seattle, WA)
Age: 25 | Gender: other
Wellbeing Before Policy: 7
Duration of Impact: 2.0 years
Commonness: 12/20
Statement of Opinion:
- Having access to this credit while still studying is beneficial.
- I am already planning for retirement, and this could help boost my savings.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 9 | 8 |
| Year 20 | 9 | 8 |
Full-time Law Student (New York, NY)
Age: 23 | Gender: male
Wellbeing Before Policy: 4
Duration of Impact: 1.5 years
Commonness: 8/20
Statement of Opinion:
- My priority is managing tuition and living expenses, not retirement.
- It's a good idea, but I'm not sure I can take advantage of it right now.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 5 | 4 |
| Year 3 | 5 | 4 |
| Year 5 | 6 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 7 | 6 |
Full-time College Student (Los Angeles, CA)
Age: 19 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 4.0 years
Commonness: 20/20
Statement of Opinion:
- This could be a nice way to save a little, but it's not my focus.
- It’s hard to think about retirement savings when I need a part-time job.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 9 | 7 |
Full-time Engineering Student (Columbus, OH)
Age: 21 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 3.0 years
Commonness: 14/20
Statement of Opinion:
- This policy might make me think more seriously about saving now rather than later.
- It's not the best timing, given my tuition and fees.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 7 | 6 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 7 |
Graduate Student (Miami, FL)
Age: 28 | Gender: female
Wellbeing Before Policy: 4
Duration of Impact: 2.0 years
Commonness: 10/20
Statement of Opinion:
- I'm concerned about student debt, so retirement savings seem far off.
- Though it's good to have this option, not sure I'll use it now.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 5 | 4 |
| Year 3 | 5 | 4 |
| Year 5 | 6 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 7 | 6 |
Part-time Student and Freelancer (San Francisco, CA)
Age: 30 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 0.0 years
Commonness: 16/20
Statement of Opinion:
- Since I'm only part-time, this won't affect me much.
- It's useful for full-time students, though.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Full-time Nursing Student (Denver, CO)
Age: 24 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 3.0 years
Commonness: 11/20
Statement of Opinion:
- I like that this encourages saving, but my focus is getting through school debt-free.
- Retirement planning seems less urgent now with my current expenses.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 7 |
| Year 20 | 8 | 7 |
Full-time Undergraduate Student (Boston, MA)
Age: 22 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 3.0 years
Commonness: 13/20
Statement of Opinion:
- This policy could provide a great foundation for future savings habits.
- Balancing work, study, and finances is hard, but this could be a step forward.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 9 | 8 |
Cost Estimates
Year 1: $1600000000 (Low: $1200000000, High: $2000000000)
Year 2: $1600000000 (Low: $1200000000, High: $2000000000)
Year 3: $1600000000 (Low: $1200000000, High: $2000000000)
Year 5: $1600000000 (Low: $1200000000, High: $2000000000)
Year 10: $1600000000 (Low: $1200000000, High: $2000000000)
Year 100: $1600000000 (Low: $1200000000, High: $2000000000)
Key Considerations
- Awareness among eligible students about the availability of the Saver's Tax Credit is crucial for uptakes.
- Financial literacy programs may enhance the effectiveness and visibility of the program.
- Behavioral responses include increased savings for retirement at an earlier age, which is generally a positive long-term financial outcome.
- The base assumptions heavily rely on the estimated proportion of students financially independent and able to claim the credit.