529 Plan Expansion: What Credentialing Bodies Need to Know
- Mickie Rops
- 6 days ago
- 3 min read
Updated: 2 days ago
On July 4, 2025, the Freedom to Invest in Tomorrow’s Workforce Act became law as part of the broader OBBB Act. For credentialing organizations, this is a milestone: 529 savings plans are no longer just for college tuition. They now cover postsecondary credentials — including certifications, occupational licenses, and certificate programs.
This expansion turns 529s from a formal education savings vehicle into a career savings vehicle, opening new pathways for professionals to access and afford your programs.
What Changed?
Previously, 529 Plans were limited to tuition, fees, and qualified expenses at colleges and universities (and for some K-12 expenses) . Now, they explicitly include "recognized industry credentials." Credentials types covered include licensures, certifications, certificate programs, and registered apprenticeship programs. Also, recognized programs to prepare for or maintain these credentials are also covered.
Which Credentials Count as "Recognized Industry Credentials?
Your program may already be eligible if it falls into one of these categories:
Accredited as a certificate or certification program by ICE, NCCA, ANSI/ANAB
Recognized in the Department of Defense COOL directories
Issued or recognized as an occupational/professional license by a state or federal agency
A certification required for an occupational license
A registered apprenticeship completion certificate
Importantly, the IRS has been charged to expand the list of “recognized” industry credentials over time, so more programs may qualify.
Which Programs Count?
Beyond the credential itself, training and prep programs also qualify if they:
Prepare participants for exams administered by a recognized credentialing body
Are listed on a state Workforce Innovation and Opportunity Act (WIOA) list
Are listed in the VA’s WEAMS Directory
Why This Matters for Credentialing Agencies
This change makes your programs more:
Accessible – candidates can use tax-advantaged dollars already set aside for education
Marketable – you can promote 529 eligibility as a financial aid option
Competitive – your program may now be seen alongside higher ed as part of the lifelong learning pathway
What Now?
Determine Your Program's Eligibility
Check if your credential/program is listed in:
If yes — you can begin promoting this benefit today. Read on!
If not — consider whether accreditation or state/federal recognition could open this door. Of course, we can help you with this! ;-)
Educate Your Candidates
Add a “Pay with 529” FAQ to your website
Send an email explainer to your candidate pool
Include messaging in exam registration and recertification reminders
Engage with Your State Plan Administrators
Reach out to state 529 plan offices to ensure they recognize your program
Provide documentation (accreditation certificates, state recognition letters, etc.)
Train Your Staff & Volunteers
Make sure your customer service and admissions teams can confidently answer:“Can I use my 529 to pay for this credential?”
Cautions
Before you jump in, be aware:
State variations: While federal law now allows this, some states may need time to update their rules.
Documentation: Encourage candidates to keep receipts and tax records in case of an audit.
IRS guidance pending: As mentioned earlier, expect further clarification on “recognized” credentials in 2026 and beyond.
Your Next Move
This new law can be a game-changer. But only if you take steps now to:
Verify eligibility
Train your staff
Educate your candidates
Actively market the benefit
If your program doesn’t yet qualify, map out the accreditation or other recognition pathway that would get you there. Contact us to learn how we can help.