Volger wrote:
The government is considering legislation that would reduce tax benefits for parents opening college savings funds for their children. If passed, the new laws would result in greatly decreased tax benefits for parents who open such accounts. Therefore, if the new laws pass, many college-bound individuals will have difficulty covering their college costs, and some would not be able to attend.
The argument above assumes which of the following?
To me, both (C) and (D) look correct. (C) has no meaning without (D). I am not sure what to think of this question.
Legislation would greatly reduce tax benefits for parents opening college savings funds for their children.
Conclusion: If the new laws pass, many college-bound individuals will have difficulty covering their college costs, and some would not be able to attend.
A. For most college-bound children, their parents’ savings accounts are the only source of educational funding.
'Most' is incorrect here. It may not be true for 'most children'. It may be true for 'many children'. Also, only source of educational funding is not correct either. Perhaps there is a scholarship that students get.
B. The legislation is being considered because many parents have been misusing savings funds dedicated to their children’s educational costs.
Why the legislation is being considered is irrelevant. We are more concerned about its impact on college students.
C. College-bound children cannot open savings funds separately from their parents.
This is an assumption. Else, students would simply open the savings funds separately from their parents and nobody would face problems.
D. Because of decreased tax benefits, some parents will not open college savings funds for their children.
The legislation would impose tax on parents who open college savings fund. To say that many college-bound individuals will have difficulty covering their college costs, and some would not be able to attend, we have to assume that some parents will not open college savings fund (and instead, college bound students themselves will open the savings funds if they are allowed)
E. Parents facing the new restrictions on college funds will find other investments to dedicate to their children’s educational costs.
We are assuming that parents facing the restrictions will not find other investments.