Skip to main content

How 529 Plans Are Re-shaping Career Preparation

Academic
August 14, 2025Nick Kolakowski

For many years, employers made it clear they wanted job candidates to have a four-year degree or better, especially if they were applying for a highly technical role in an arena such as cybersecurity or project management. But with technologies such as artificial intelligence (AI) supercharging the world’s digital evolution, companies can no longer rely solely on candidates with a bachelor’s or master’s degree—they urgently need professionals with the latest skills to fill their open roles. That could have a profound impact on the nation’s educational system, particularly when it comes to schools offering certifications and non-degree training.

Now there’s yet another factor in this mix: legislative changes to 529 savings plans could give tech professionals and other specialists a tax-advantaged way to quickly fund the upskilling they need to grow their careers. How will schools react to this change? That’s a question with enormous implications.

The ‘New’ 529 savings plan

While many families rely on 529 savings plans as a means to save for their kids’ college education, provisions in the  H.R. 1 budget reconciliation bill signed into law in June allow 529 funds—which are made with after-tax money, and can be used tax-free on qualified expenses—to be spent on nondegree training and credential programs, including:

  • Upskilling and training: If you’re a tech professional who quickly needs to update their skills, 529 funds could help you finance a stint in a cybersecurity bootcamp, data analysis course or similar training program.

  • Certification and licensing costs: Yes, 529 funds can be used to pay for the exams, practice tests, and other fees associated with earning and maintaining certain eligible credentials. For tech professionals who must obtain multiple certifications, this can translate into significant cost savings over the long term.

  • Workforce Development: The legislation allows tech pros to use 529 funds to support mid-career changes, including apprenticeships.

These changes in 529 savings plans arrive at a crucial moment for companies that employ tech professionals. According to CompTIA’s latest Tech Jobs Report, a significant percentage of job postings for in-demand tech roles such as network support specialists, database administrators and web developers don’t require a four-year degree. Meanwhile, data from SHRM says 83% of human resources leaders think upskilling will be crucial for workers who want to remain competitive in the current job market, especially given how AI is radically changing how many companies operate.

In other words, skills-based hiring is gaining momentum, along with employers’ recognition that upskilling is critical. Tweaks to 529 savings plans make learning these skills and others more economical than ever. But are schools rising to meet this moment, particularly when it comes to non-degree programs and certifications?

Are colleges and universities adapting?

First, the good news: many colleges already have certification and training programs in place, particularly community colleges that have always taken a career-oriented approach to education. Some universities also have extension or continuing-education programs for professionals, complete with degrees. For example:

Although many schools are already offering training and programs that tech pros can leverage with their 529 dollars, can we expect more colleges and universities to roll out similar programs?

“I don’t expect four-year universities to start embedding industry certifications into their existing undergraduate degree programs,” said David Reynaldo, founder of College Zoom – Admissions Consulting, which offers consulting services to prospective college students. “They’ve always been 529-eligible institutions, so if that kind of innovation were a priority, we would have seen it already.”

Traditional four-year institutions are often oriented as research institutions, Reynaldo added, which would make them reluctant to expanding undergraduate-level certification programs in a “meaningful way.” There’s also the issue of budget, with public universities less likely to devote their resources into programs that are already delivered by community colleges and independent organizations: “Virtually all community colleges offer certificates as part of their workforce development mission.”

So, while a school like Western Governors University, which is built to serve non-traditional students, might lean heavily into online delivery, industry certifications and training, traditional universities might not adopt a similar program at scale anytime soon. (Of course, that could also change if more schools sense they can tap into a new pool of students with 529 funds by offering more certifications and training modules.)

It’s also important to note that some of the tech industry’s biggest companies are partnering with schools on certification initiatives. Amazon’s AWS Academy, which has paired with dozens of institutions in the U.S. to offer cloud-based, certification-centric training, is just one example; Google and Microsoft have cloud training and certifications available via institutions and platforms such as Coursera. These school-company partnerships are yet another avenue for students to use their 529 funds to adopt tech skills.

What tech professionals need to know

If you’re a tech pro interested in upskilling, here’s what you need to know about the “boosted” 529 savings plan in the context of your local schools:

  • Know what’s offered: The legislation broadly defines qualified expenses to include tuition, fees, books, supplies, and equipment for any “recognized postsecondary credential program.” Do your best to break out what you want to pay for—whether that’s training, certifications, or something else related to your career—and see which programs align with those needs.

  • Find eligible programs: A program is generally eligible for 529 funds if it’s authorized under the Workforce Innovation and Opportunity Act (WIOA) or offered by an accredited institution. Start with your state’s Eligible Training Provider List (ETPL) or by looking at certificate programs offered by accredited colleges and universities.

  • You can be your own beneficiary: You can open a 529 savings account for yourself. If you’re doing a bit of long-term planning for future training, starting an account today will give you more time to grow tax-advantaged savings.

  • It’s a flexible savings tool: Worried that you’ll save too much for your training needs? If you don't use all the funds, up to $35,000 can be rolled over into a Roth IRA for the beneficiary, provided the account has been open for at least 15 years.  

This material is provided for informational purposes only and does not constitute tax, legal, or accounting advice. This article summarizes some portions of 26 U.S. Code § 529 and recent amendments thereto but does not reflect all aspects of this statute. Eligibility for using 529 funds for educational expenses depends on individual situations, state laws, and the terms of a specific 529 plan. Readers should consult a qualified tax professional and their 529 plan administrator to verify eligibility and evaluate how these changes may impact their individual circumstances before making any decisions.