Future Planning

What Are the OBBB Enhancements to the 529 Plan?

New 529 rules expand savings options for K–12 and career training.
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What Are the OBBB Enhancements to the 529 Plan?
Vitalii Vodolazskyi/Shutterstock
Anne Johnson
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During the 2023–24 academic year, college students and their families paid 48 percent of college costs, according to the Education Data Initiative. Meanwhile, 35 percent of families used a 529 college savings plan.
The 529 plan has been a convenient savings mechanism for years, but the One Big Beautiful Bill (OBBB) has provided enhancements that make it even more attractive. But how does the 529 plan work, and what advantages did the OBBB offer to parents and grandparents?

529 Plan Earnings Not Taxed

It’s important to save for education expenses, but under normal circumstances, any earnings generated by a traditional savings account are taxed.
Anne Johnson
Anne Johnson
Author
Anne Johnson was a commercial property and casualty insurance agent for nine years. She was also licensed in health and life insurance. She went on to own an advertising agency, where she worked with businesses. She has been writing about personal finance for 10 years.