- Now 529 savings plans can be used for eligible credential programs, certifications, licensing exams and continuing education.
- Workers changing careers or reskilling may gain access to tax-advantaged education savings.
- To be eligible for use of 529 funds, programs must meet federal workforce or national credentialing requirements.
New rules are expanding how tax-advantaged
529 savings plans can be used to pay for expenses beyond college, unlocking money that workers can use to advance or change careers.
Under provisions in President
Donald Trump's One Big Beautiful Bill Act, signed into law in July 2025, you can use a 529 plan to save not only for your child's education but also for your own career training or professional credentials.
"You can now use them really as lifelong education savings accounts," said Vivian Tsai, managing director of TIAA Education Savings. The changes are "hugely transformational for adult learners," she said.
TIAA is the third-largest 529 plan program manager, with $83.5 billion in assets as of March 31, according to data compiled by
ISS Market Intelligence.
Savings in a 529 plan grow tax-free, and withdrawals for
qualified education expenses are tax-free. You may also get a state tax deduction or credit — more than 30 states offer a state tax break for 529 plan contributions.
Under OBBBA, you can now withdraw funds from a 529 account, federally tax-free, for a wider range of qualified education expenses. Those
include tuition, books and fees for credential programs; testing fees to earn or maintain a certification or license; and continuing education costs needed to renew a credential.
The OBBBA also expanded 529 plan withdrawals to include more
qualifying K-12 education expenses. The legislation follows other updates to 529 funds that allow them to be used to repay student loans or rolled over for retirement savings.
Certified financial planner Nathan Sebesta, owner of Access Wealth Strategies in Artesia, New Mexico, said he started using funds from a 529 plan in 2020 to help pay for his master's degree in financial planning. He later changed the account beneficiary to his daughter.
Now, he advises clients to consider using money from a 529 account for classes and programs to help them switch careers or grow in their field.
"If someone's already spending $1,000 or $2,000 on continuing education, it just makes sense," he said. "They could just pre-fund it monthly. By the time that expense comes up, it's already in the 529 plan, ready to go."
More workers may need to unlock 529 plan balances as they face layoffs or job transitions, said Steve Chen, CEO of Boldin, a digital financial planning platform.
"Some folks are then going to have to retrain and reskill, and so having the ability to tap into tax-efficient dollars for funding ongoing lifetime education makes a lot of sense," he said.
But 529 funds cannot be withdrawn for just any artificial intelligence boot camp or online credential program, experts say.
"Always read the fine print," said Jeffrey Judge, a CFP with Chesapeake Financial Planners in Forest Hill, Maryland. He said he had one client who used a 529 plan to pay for a project management certificate at a community college, but discovered a coding program he was interested in didn't qualify.
The new law requires 529 funds to be used for credentials and programs authorized under the federal Workforce Innovation and Opportunity Act or national credentialing organizations. The 529 account can also be used for withdrawals to earn licenses issued or recognized by a state or federal agency.
"If it's something that just started up last year and has no affiliation to known associations in the industry, you know, you might want to be a little bit more careful," said Martha Kortiak Mert, chief operating officer at Saving for College, a part of the 529 plan-focused fintech company Backer.<small>Source: CNBC</small>
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Trump's 'big beautiful bill' turned 529 plans into 'lifelong education' accounts, expert says: How to take advantage
CNBC
June 01, 2026
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