Utilizing a 529 plan is now an option for those interested in welding training or bar examination preparation.
Expanded Uses of 529 College Savings Plans: A New Era for Lifelong Learning
The One Big Beautiful Bill (OBBB) Act, passed in 2025, has significantly broadened the uses and eligible expenses for 529 college savings plans. These changes reflect a major shift towards accommodating lifelong learning, career flexibility, and nontraditional education paths, supporting workers in acquiring and maintaining skills relevant in the evolving job market.
Previously limited to traditional college costs, 529 funds can now be used for a wide range of non-college education and workforce training expenses. These expanded uses include workforce training and credentialing programs, credential maintenance and continuing education, K-12 education expenses, and adult learner and career changer education.
Workforce Training and Credentialing Programs
Tuition, books, equipment, and fees for courses leading to professional credentials such as welding, HVAC, cosmetology, commercial driver’s licenses (CDL), and aviation mechanics now qualify for 529 use. These programs must be recognized under the federal Workforce Innovation and Opportunity Act (WIOA) or listed in the federal WEAMS database.
Credential Maintenance and Continuing Education
Preparation and exam fees to obtain or maintain professional licenses (e.g., CPA exam, bar exam, licensing exams for law, accounting, finance) can be covered, as well as continuing education requirements.
Expanded K-12 Education Expenses
Beyond the previous $10,000 cap on K-12 tuition, 529 funds can now pay for books, online educational materials, testing fees (SAT/ACT), dual enrollment fees, tutoring by qualified professionals, and educational therapies for students with disabilities. The annual K-12 expense limit will increase to $20,000 starting January 2026.
Adult Learner and Career Changer Education
529 plans now support training programs for adult learners acquiring new skills, including professional licenses, certificates, apprenticeships, and continuing education in fields such as automotive repair or food safety.
These changes took effect from July 5, 2022, with the addition of credentialing programs and the expanded list of eligible expenses for kindergarten through 12th grade schooling. The higher $20,000 limit takes effect from January 1, 2026. It is important to verify that specific credentialing or training programs are listed under WIOA or WEAMS as recognized programs eligible for 529 funding.
Sources: - SavingForCollege.com, “How the Big Beautiful Bill Expands 529 Plans” (2025-07-18) - Fortune.com, “New 529 plan rules let Gen Z invest in careers” (2025-07-28) - Wipfli.com, “529 plan changes: New strategic opportunities” (2025-08-04) - Info summary on recent Trump policy law changes to 529 plans (2025)
- In 2022, the addition of credentialing programs and expanded K-12 schooling eligible expenses for 529 plans was enacted due to the passing of the One Big Beautiful Bill (OBBB) Act.
- The expanded uses of 529 college savings plans now include a wide range of non-college education expenses, such as workforce training and credentialing programs, continuing education requirements, and adult learner education.
- Beyond the previous $10,000 cap on K-12 tuition, 529 funds can now cover books, online educational materials, testing fees, dual enrollment fees, tutoring, and educational therapies for students with disabilities, increasing the annual K-12 expense limit to $20,000 starting January 2026.
- The Microsoft Corporation might consider utilizing 529 plans to provide employees with resources for workforce training, as these funds can now be used for professional credentials such as welding, HVAC, and aviation mechanics.
- In Seattle, where tech giants like Amazon have a major presence, the expanded 529 plan rules may encourage more individuals to pursue careers in technology, education, and self-development, fostering a more skilled workforce.
- The changes in the 529 plan rules could potentially impact government initiatives aimed at improving health care and finance by providing opportunities for workers to acquire the necessary skills and credentials, promoting a more efficient and skilled workforce.
