The federal One Big Beautiful Bill Act has so many troublesome provisions that any positive elements can easily get overlooked.
But hidden deep within HR 1, in section 70413, are changes to a college savings instrument that could help make postsecondary education attainable for thousands more students.
The 529 plan, which was created decades ago by Section 529 of the Internal Revenue Code, initially was designed as a tax-advantaged way for people to save for their beneficiaries’ college tuition.
Over the years, the 529 program has expanded the number of expenses that qualify for coverage.
A few years ago, 529 plans were expanded to cover K-12 tuition at private schools. It was then expanded to allow beneficiaries to use the funds to pay off student loans. Both were welcomed changes. This year under the OBBB Act, the amount allowed for K-12 tuition doubled from $10,000 to $20,000.
Also included in the spending bill as a new qualifying expense is educational and behavioral therapy for students with disabilities. In addition, higher education programs that confer certificates rather than degrees such as technical training institutes are covered, along with the expenses for tools and equipment required for apprenticeships.
These changes are good news for those wanting to continue their education after high school and for those who want to financially support them. It’s also good news for the economy as the broader guidelines help support skilled trades industries that have experienced a shortage of qualified workers.
“That’s a very positive change for Washington families,” said Luke Minor, senior director of postsecondary affordability at the Washington Student Achievement Council.
Washingtonians have been taking advantage of the WA529 plan since 1998. Combined with the state’s prepaid college tuition program GET, there are currently 92,000 tax-friendly college saving accounts in the state valued at $2.5 billion.
Much credit for the changes is due to the national associations and trade organizations that are dedicated to making college more affordable.
“While we know the 529 plan has gotten more broad in its usage over the years, we know that students are taking various pathways to get college or career training,” Minor said.
Despite the growing divisiveness in the nation’s capital, including over passage of the OBBB, at least some good came out of this legislation that will set the nation back in many other ways. Washingtonians should take the good with the bad and take advantage of the more generous guidelines available for Washington’s 529 plan and invest in their families’ future.
