Sponsors (17)
The bill makes workforce credentials, apprenticeships, and military-aligned credentials more affordable via 529 accounts, but increases the risk that accounts (and taxpayer-subsidized benefits) will be drained or used for low-value credentials rather than traditional degrees.
Students, parents/families, workers (including low-income individuals) can use 529 accounts to pay for recognized credential programs, apprenticeships, testing, and continuing-education fees, making postsecondary training and upskilling more affordable.
Veterans and service members can use 529 funds for credentials listed in VA WEAMS and DoD COOL, better aligning education savings with military training and transition pathways.
Parents, families, and students may see 529 accounts depleted more quickly (through continuing-education and recurring testing fees), leaving less available for traditional degree costs and complicating college-saving plans.
Taxpayers and students face a risk that broad program definitions and Secretary discretion will allow 529 funds to cover low-value or nontransferable credentials, effectively subsidizing training with limited long-term benefit.
Based on analysis of 2 sections of legislative text.
Allows 529 plan funds to pay for recognized postsecondary credentialing expenses (tuition, fees, books, required testing, and required continuing education) for qualifying credential programs.
Introduced February 26, 2025 by Amy Klobuchar · Last progress February 26, 2025
Allows tax-advantaged 529 plan funds to be used to pay for postsecondary credentialing expenses. The change adds a new category of "qualified postsecondary credentialing expenses" — covering tuition, fees, books, supplies, equipment, required testing fees, and required continuing-education fees — for enrollment in recognized credential programs identified by state WIOA lists, the VA directory, exam-preparation links to recognized credentialing organizations, or by the Secretary of Education after consultation with the Secretary of Labor. The rule also defines which credentials and programs count (including registered apprenticeship certificates, certain industry credentials, DoD COOL entries, and state/federal occupational licenses) and applies to distributions made after enactment.