529s aren’t just for 4-year schools

By Anita Kelley, Savings Division Director, State of Alabama Treasurer’s Office 

So you saved in a 529 plan for your child, and they don’t want a traditional four-year college degree? No problem! 529 college savings plans have evolved in many ways since they first started 35 years ago. With this evolution, there has been an increase in flexibility regarding the usage of these accounts. For example, the types of institutions include not only four-year colleges and universities, but community colleges, trade, technical and vocational schools, and registered apprenticeship programs.   

With the cost of higher education continuing to rise, many students are opting to focus solely on their chosen field and develop the knowledge and skills specific to their anticipated career. Trade, technical, vocational schools, and apprenticeships offer just what these students are looking for. Plumbing, HVAC, dental hygiene, sonography, radiation therapist, and web developer are just a few of the many top paying careers that can be achieved with a degree or certification from these schools. In most cases, these degrees can be achieved much faster and with lower tuition than a typical four-year college.

Apprenticeships are another way to receive training for your desired career and with the added bonus of being paid while doing so. They offer learning from actual employees in the field, and you get real hands-on experience. According to the U.S. Department of Labor, the number of registered apprentices rose 64% from 2010 to 2020. Mechanics, plumbers, electricians, machinists, and carpenters are some of the top industries that offer apprenticeships. 

Need to know if the trade or vocational school your child wants to attend is qualified and eligible for 529 Plan funds? Visit studentaid.gov/fafsa-app/FSCsearch to search for eligible schools. For eligible apprenticeships, go to www.apprenticeship.gov. The Department of Labor provides this search tool to see if your apprenticeship is eligible. If it is, your 529 plan funds can be used toward program fees, books, supplies and equipment, including tools needed for the trade.

This article originally appeared on the College Savings Plans Network (CSPN) website. CSPN serves as a clearinghouse for information among state-administered college savings programs.

---

About the author:

Anita Kelley is the Savings Division Director for State of Alabama Treasurer’s Office. Anita has been with the State of Alabama Treasurer’s Office for nine years as Director of the Savings Division, which oversees the Alabama ABLE Savings Plan, CollegeCounts: Alabama’s 529 Plan, and PACT (Prepaid Affordable College Tuition). She has previously served as Treasurer of The College Savings Plan Network and Co-Chair of the CSPN Communications Committee. Prior to working for the Treasurer’s Office, Anita was a Banking Center Manager and Vice President at BBVA Compass for 18 years where among other things, she sold 529 accounts to clients. She graduated from Huntingdon College in Montgomery, Ala.