Big Beautiful Breakdown: Benefits of Section 529 Plans for Continuing Education

Section 529 plans—often called qualified tuition plans—have long been one of the most effective ways to save for education expenses. These tax-advantaged accounts allow parents, grandparents and even individuals to invest for future learning while minimizing taxes along the way.

Although contributions aren’t deductible at the federal level, all investment growth inside a 529 plan is tax-free. And when funds are withdrawn for qualified education expenses, those withdrawals are also tax-free.

Now, thanks to the recently enacted One Big Beautiful Bill Act (OBBBA), 529 plans have become even more versatile. They are expanding beyond traditional college costs to support broader education and lifelong learning goals.

Expanded Education Uses

For years, families used 529 funds primarily for college tuition, room and board, and up to $10,000 per year for K-12 tuition. As of July 5, 2025, that flexibility can grow significantly.

Under the OBBBA, 529 plans may now cover a wide range of post-secondary credentialing expenses, including programs for:

• Professional and occupational licenses
• Trade and technical certifications
• Continuing education for credentialed professionals

That means 529 funds can now be used for real-world, career-building programs such as:

• Licensing fees for barbers, cosmetologists or electricians
• Continuing medical education for doctors and nurses
• Tools or materials needed for vocational certificates, like welding or HVAC

In short, the 529 plan has evolved from a college-only savings account into a career and lifelong learning fund.

Who Can Benefit

While 529 accounts are commonly set up for children or grandchildren, adults can open and fund them for their own professional development—or even for a spouse.

Because there’s no time limit on when the funds must be used, account owners can leave the money invested for years until the right opportunity arises. Beneficiaries can also be changed at any time, allowing families to pass along unused funds to others.

Another major advantage: up to $35,000 in unused 529 funds can be rolled over into a Roth IRA, giving savers a way to repurpose education funds into long-term retirement assets.

Expanded K-12 Benefits

The OBBBA also enhances 529 plan benefits for younger students. In addition to tuition, families can now use 529 funds tax-free for:

• Books and online learning materials
• Tutoring and academic support
• Standardized testing fees
• Therapy services for students with disabilities

Beginning in 2026, the annual withdrawal limit for K-12 education expenses will double from $10,000 to $20,000, giving parents more flexibility to invest in their children’s early learning years.

A Smarter Way to Fund Education and Opportunity

The One Big Beautiful Bill Act cements the 529 plan’s role as one of the most flexible, tax-advantaged tools for families and lifelong learners alike. Whether you’re saving for a child’s schooling, preparing for a new career or investing in your own professional growth, a 529 plan can help fund those goals. Your money can work efficiently and tax-free.

To learn more about Section 529 and other education savings strategies for you and your family, contact Illumination Wealth.