(Signed into law July 2025)
If you’re saving for your child’s education—or planning your own—2025 brings powerful new updates to 529 savings plans. The One Big Beautiful Bill Act (OBBBA) adds flexibility, boosts aid eligibility, and helps families stretch their dollars even further.
Here’s what you need to know—fast:
529 plans can now cover more K–12 expenses, including tutoring, test prep, online curriculum, and special education services. That means you can start using tax-free education dollars earlier—supporting your student from elementary school to college.
You can also shuffle or front-load contributions between siblings to reduce your visible assets during key financial aid years. Done right, this can unlock more need-based aid and lower your out-of-pocket costs.
Looking beyond traditional four-year colleges, 529s now cover career-focused programs like trade schools, tech bootcamps, and healthcare certifications. Plus, if the original student doesn’t use all the funds, you can roll them into a sibling’s ABLE account—no penalties, no taxes.
If you’re in the Dave Ramsey camp, you’ve probably heard his advice to use mutual funds labeled “Education Savings Accounts” instead of state-sponsored 529s. That can give you more control and investment freedom. But with the 2025 updates, 529s have become far more flexible, aid-friendly, and useful across a variety of educational paths.
What Happens Next? State Action Matters.
While OBBBA sets the federal stage, now the spotlight turns to the states. Will each state align their 529 programs to fully reflect these expanded uses? And what about California?
Families across California would do well to ask: Will Governor Newsom—or any candidate campaigning for California governor in 2026—and state leaders support school choice by aligning with these updates? Will they expand state-level aid or provide incentives for families pursuing non-traditional education paths, private schools, or alternative programs?
Whether you live in CA, TX, or anywhere else, now’s the time to watch how your state responds—and to speak up if you want broader educational freedom and support.
Pro-Solutions You Can Use Today
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