Back-to-school season is more than new notebooks and fresh starts. It also reminds many families about the rising cost of education and the need to plan. The latest additions to 529 education savings accounts under the One Big Beautiful Bill Act (OBBBA) offer new opportunities to financially support your children’s and grandchildren’s learning. These tax-advantaged savings accounts help families cover educational costs, and the updates under OBBBA make them even more flexible. Here’s what’s new to help you save for your family’s education.
K–12 Changes
Starting July 5, 2025, 529 funds may now be used for K–12 expenses such as curriculum materials, books, online learning tools, tutoring (with specific requirements), standardized test fees, dual enrollment courses, and educational therapy for students with disabilities.
Beginning in 2026, the annual 529 withdrawal limit for K–12 will also increase from $10,000 to $20,000 per child.[1]
Support for Postsecondary Education
OBBBA also broadens “qualified expenses” for postsecondary uses. Families can now use 529 funds for industry-recognized credentials, apprenticeship programs, licensing fees, exam costs, training tools, and continuing education tied to the Workforce Innovation and Opportunity Act.
More Flexibility for Inclusion and Planning
For parents with children with disabilities, important ABLE account provisions such as rollovers from 529 plans, the “ABLE to Work” contribution flexibility, and eligibility for the Saver’s Credit are now permanent. This change removes the uncertainties that came with the original December 31, 2025, expiration date.
Why this matters
Educational savings remain a priority for many families, no matter their children’s goals. These new rules allow funds to be used for more expenses, like tuition and textbooks for high school students taking college courses or specialized therapy for children who need additional support. With their expanded uses, 529 accounts are now flexible savings tools that can support a variety of academic paths, including private schooling, trade certifications, and alternative learning opportunities.
Families may feel added expense pressures at the start of a new school year. These new 529 benefits can help families use the power of tax-free savings to address a wider array of learning needs while keeping more dollars intact for the future.
Now is the perfect time to revisit your education savings strategy under the new rules. At Prime Capital Financial, we help make sure your 529 accounts are working alongside other investments and savings vehicles to create a comprehensive education funding plan.
Financing your child’s education is important. For the best shot at success, young adults must also understand their own financial lives and how to use the funding built for them wisely. If you plan to send a child to college, download our free Setting Up Your Student For Success Guide and empower your child with foundational money knowledge. It’s never too early to start making wise financial decisions.
[1] https://my529.org/2025/07/federal-changes-to-qualified-education-expenses/
