(February 6, 2024) - Why 529 College Savings Plans are Perfect for Technical and Vocational Pathways
The landscape of higher education is constantly evolving and has even more so in the past few years as students began suddenly learning, studying, and networking from behind the screen. Recognizing that learning can happen from anywhere, at any time, and in a variety of ways is the foundation for increasing access to higher education.
Diversity in Education
When we think of higher education from a holistic point of view, it’s important to consider that employees who come to the workplace with education and training from vocational, technical and apprenticeship programs are equipped with practical knowledge and skills that allow them to be job-ready and prepared to meet the demands of the specific industry. Through practice and hands on learning next to licensed professionals, apprentices gain insights to the real work that may not resonate as well from a classroom setting alone. This approach can be meaningful to employees and employers alike.
Supporting Economic Recovery
The cost of pursuing a degree continues to increase and students may find themselves taking out more student loans than necessary and receiving a credential that may or may not best meet their career goals. Through individual savings efforts and a careful and thoughtful educational path that supports career goals and passions, students with technical and vocational training can often gain valuable skills at a more affordable cost and enter the workforce sooner. As a result, these students may find themselves in a high demand position with a competitive salary.
Using 529 Funds for Trade Schools and Apprenticeship Programs
Families who are saving for their child’s future education in a 529 plan can be confident that if their child prefers a program through a technical, vocational or apprenticeship pathway, their savings will cover a variety of those expenses.
Here are three tips for maximizing the benefits of a 529 plan for technical, vocational and apprenticeship training programs:
- Research Qualified Institutions and Apprenticeship Programs: One of the first things to confirm is that the trade school meets the criteria as an eligible educational institution, or the apprenticeship program is registered with the U.S. Department of Labor. To search for trade schools, technical schools, career training, or certification programs use this career search tool sponsored by the Department of Labor. Having this information confirmed ahead of time will prevent any surprises later.
- Understand Qualified Educational Expenses: 529 savings plans can cover a variety of expenses, such as tuition, fees, required books and supplies and some room and board expenses. Additionally, apprenticeship program related materials and equipment may also be qualified. To be sure, the student and parents should review chapter 7 in IRS Publication 970 for specific details.
- Watch for Updates or Changes: Education policies, regulations and processes can change over time, and these changes can have both positive and negative impacts. It’s always best to keep up on news and information, particularly that coming from your 529 administrator or a financial or tax advisor.
Whether a student chooses to continue their education and earn a degree or certificate for their training, their options are wide open, and the experience will provide them a positive and lasting impact.
By embracing these diverse pathways and using savings options like a 529 plan, these future students can pursue careers that satisfy their passions and help them build a fulfilling career.
In the words of Malcolm X – “Education is the passport to the future, for tomorrow belongs to those who prepare for it today”. Let’s give the younger generation the encouragement to pursue their dreams, the tools and information to be financially prepared and the opportunities to create their educational pathways from the variety of available options.
By Jackie Ferrado, Associate Director for Community Engagement, WA529
Jackie Ferrado serves as the Associate Director for Community Engagement with the Washington 529 College and Education Savings Plans (WA529). Since 1998, tens of thousands of students have used more than $1.7 billion of their WA529 savings to attend colleges and trade schools in the U.S. and at least 15 foreign countries. Outside of work, Jackie enjoys baking, reading, and spending time with her three grandchildren.