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House OKs third-party management for Louisiana START 529 program; lawmakers press on costs and safeguards
Summary
The House passed HB 7 49 allowing the START 529 savings program and related accounts to move to a third‑party platform while retaining state oversight. Members questioned an $8 million conversion fiscal note, potential management fees, and safeguards against ESG mandates; sponsor said the change will improve security and returns for account holders.
The Louisiana House on April 23 approved HB 7 49, a bill authorizing the transfer of operations for the state’s START 529 college‑savings program (and related ABLE and K–12 plans) to a third‑party program manager while preserving regulatory oversight by state authorities.
Representative Carver, sponsor of the bill, said the measure is intended to put the program on a modern, secure online platform and to improve customer experience after last year’s cyber incident. "This enables the use of a third party, platform and program manager," he said, adding it should be "more secure" and provide a better user interface. Carver told members that the conversion carries an estimated implementation cost (fiscal note) and that the governor’s budget had previously included funding to cover part of the conversion.
Members pressed on fiscal and policy details. Representatives asked whether the program manager could apply ESG or DEI investment screens; Carver said account holders would be able to direct their investment mixes and that safeguards could be discussed en route to the Senate. On fees, Carver said forecasts suggested users could face management fees in the future (he mentioned a possible ~$50 per year figure) but that long‑term returns and customer protections should offset costs. He also said the Treasurer’s Office would continue to administer any state match/enhancement and retain regulatory oversight.
The House passed the bill in the floor sequence reported in the transcript; the clerk recorded 94 yays and the measure passed.
Why it matters: shifting to a third‑party platform changes the administration of a widely used state financial program for families saving for college. The bill raises questions about cybersecurity, vendor costs, fee structures and whether the state retains adequate oversight to protect account holders.
Next steps: the bill proceeds as passed on final reading toward enrollment and any required transmittal steps. The Treasurer’s Office and the program manager (when selected) will implement the technical conversion and must report as required by statute and rule.
Transcript evidence: sponsor presentation and extended Q&A (SEG 1766–2053) including questions about fiscal notes, management fees and program safeguards.
