529 Savings Plans Aren’t Just for College
Increasing numbers of students are choosing vocational schools as a path to a viable career.
When 529 plan advocates encourage saving for higher education, they usually mean saving for college or university expenses. Vocational schools often—maybe too often—get overlooked.
That’s right. Vocational schools, which are experiencing big spikes in enrollment with their promise of well-paying careers, are eligible educational institutions where 529 funds can be used to pay for qualified higher education expenses. Money saved in a 529 plan like UESP can be used to pay expenses such as tuition, mandatory fees, books and even computers at any post-secondary institution—college, university, or vocational school—in the United States or abroad that participates in federal financial aid programs.
It’s true that a college education can provide a substantial earnings dividend. The gap in median annual income between a high school graduate and someone with a college degree is $19,550, according to 2010 Census Bureau data.
Despite the premium that a college degree can deliver, there are other ways to attain a viable career without the outlay of money and time required to earn a college degree. There are 29 million jobs that pay between $35,000 and $75,000 a year for workers without bachelor’s degrees, according to a joint study by the Georgetown University Center on Education and the Workforce and educational consultant Civic Enterprises.
The study found that career and technical education (CTE) jobs have largely shifted from blue-collar occupations to white-collar and health care jobs.
“For both men and women, the best CTE jobs are in sub-baccalaureate STEM (science, technology, engineering, and mathematics) and health care, where over 80 percent of jobs pay middle-class wages,” according to the study’s authors.
The study contends that the nation’s career and technical education system, which includes vocational schools, “is the missing middle ground in American education and workforce preparation.”
Today, post-secondary certificates are the second most common higher educational achievement award after the bachelor’s degree, exceeding associate and master’s degrees, according to the study. About 1 million post-secondary certificates are awarded each year.