Sponsor
Janelle S. Bynum
Representative · D-OR
Representative · D-OR
The bill lets families use 529 savings for college application fees—reducing immediate costs and simplifying use of education funds—while modestly lowering federal revenue and potentially encouraging broader application behavior with limited educational benefit.
Students and families can use 529 plan funds to pay college application fees tax-free, lowering out-of-pocket costs and easing cash flow during the application and admissions process.
Families gain more flexibility to use saved 529 funds earlier for admissions-related expenses, making it easier to time education spending around the application season.
Treating application fees as qualified expenses reduces the risk of taxable withdrawals and associated penalties when 529 funds are used for admissions costs.
Taxpayers could see a modest reduction in federal revenue because more 529 withdrawals would be tax-free.
Allowing application fees to be paid from 529 plans may slightly encourage students to submit more college applications, increasing application-related spending without necessarily improving admission outcomes.
Based on analysis of 2 sections of legislative text.
Permits 529 plan distributions to be used for fees required of a beneficiary to apply to eligible educational institutions, treating them as qualified expenses.
Official title: To amend the Internal Revenue Code of 1986 to permit fees for admissions applications to higher education institutions to be paid from a 529 plan, and for other purposes.
Introduced January 22, 2026 by Janelle S. Bynum · Last progress January 22, 2026
Allows Section 529 plan owners to use account funds to pay college application fees by adding application fees required of a beneficiary to apply for admission to an eligible educational institution to the list of qualified distributions. The change amends the tax code (26 U.S.C. §529) and takes effect for distributions made after enactment, treating those application fees as qualified higher education expenses for 529 plans.