Facing pressure from both sides of the aisle in Washington as well as parents and students across the United States, President Barack Obama has abruptly dropped a proposal to tax earnings on withdrawals from a popular college savings plan.

After an idea to swap out tax breaks for the wealthy turned into “a distraction”, White House officials on Tuesday confirmed that the administration would not implement its proposal to tax earnings on so-called 529 accounts. The initiative was part of a wider program, unveiled as part of his State of the Union speech last week, to amend the US tax code and help middle-class families.

Prominent Democratic representatives including House minority leader Nancy Pelosi, of California, and Chris Van Hollen, of Maryland, campaigned for Obama to keep earnings on the accounts tax-free.

Republicans were more public in their dissent, saying that losing the 529 plans would hurt the middle class. “It’s another example of this outdated, top-down approach when our focus ought to be on providing opportunity for all Americans,” said House speaker John Boehner, of Ohio, on Tuesday.

White House officials told reporters that the administration was dropping the proposal to allow Congress to focus on the broader tax initiative.

“We proposed it because we thought it was a sensible approach, part of consolidating six programs to two and expanding and better targeting education tax relief for the middle class,” a White House official told the Associated Press.

“Given it has become such a distraction, we’re not going to ask Congress to pass the 529 provision so that they can instead focus on delivering a larger package of education tax relief that has bipartisan support.”

Families with 529 plans and a similar college-savings program called Coverdell “typically have more wealth and education that these accounts”, according to a December 2012 report from the Government Accountability office. The report also said that median financial asset value for families with these types of accounts was $413,500.