Bill in Congress would allow students, workers to use 529 savings plans to pay for training programs
The Freedom to Invest in Tomorrow’s Workforce Act would give individuals in Virginia and across the country the freedom to use their 529 savings plans to cover the costs of certain workforce training and credentialing programs.
The bill would also allow students to use their 529 funds to pay for associated costs related to certification exams and maintenance of certification credentials. Right now, only colleges, vocational schools, universities, or other post-secondary institutions are considered an eligible 529 education savings plan expense.
Seventh District Democrat Abigail Spanberger and First District Republican Rob Wittman are two lead co-sponsors of the bill.
“Especially as we rebuild our economy in the wake of COVID-19, we need to make sure Central Virginia students and workers receive the training required to remain competitive and successful. 529 savings plans have long ensured that the next generation of Virginia workers can afford a higher education — but students are currently constrained from using these accounts to pay for necessary credentialing programs and exams,” Spanberger said.
“Even before the pandemic, businesses across Virginia faced a severe talent shortage due to a lack of career and technical training as well as STEM education. Now, as we rebuild our economy, cultivating a workforce with in-demand skill sets is more important than ever,” said Wittman. “One of my top priorities is ensuring our students cultivate the skill sets needed to thrive in today’s workforce. This bipartisan legislation creates opportunities for students to pursue post-secondary credentialing programs by allowing them to use their 529 savings to pay for tuition, exams, and supplies.”
The Freedom to Invest in Tomorrow’s Workforce Act is supported by the Associated Contractors of Virginia, Virginia 529, and the Professional Certification Coalition — which represents more than 100 organizations.
“Millions of families trust 529 plans with their hopes, dreams, and savings for college,” said Mary Morris, CEO, Virginia529. “But the needs of our country’s economy and workforce are changing, and a significant group of Americans whose post-high school plans include career and technical education and training programs may be unable to use this beneficial savings option to cover the costs of some high-quality, stackable certificate programs, apprenticeships and other postsecondary credentialing programs.
“Lifelong learning is a reality today, and we are grateful to Reps. Spanberger, Wittman, Upton and Phillips for sponsoring The Freedom to Invest in Tomorrow’s Workforce Act which will make 529 plans more flexible and effective as a financial planning tool for individuals pursuing their educational and career goals. We look forward to working with them on passage and implementation of this important bill which closes an education coverage gap in 529 plans today,” Morris said.
“As the largest construction trade organization in the state, AGC of Virginia is proud to support The Freedom to Invest in Tomorrow’s Workforce Act. This important legislation will help American workers in the vital construction industry get the education they need to remain efficient, effective, and safe. As we continue our country’s economic recovery, a robust construction workforce is needed now more than ever,” said Brandon Robinson, CAE, CEO, Associated General Contractors of Virginia.
“AGCVA applauds Congresswoman Spanberger and Congressman Upton for introducing The Freedom to Invest in Tomorrow’s Workforce Act. Their bipartisanship and exemplary legislation to provide essential education and training will no doubt support America and help our members survive and prosper in the challenging construction industry,” Robinson said.
“This important legislation will provide an incentive for families to save money that can be used to pay for job training and for expenses associated with obtaining or maintaining a valuable professional certification or other postsecondary credential,” said Denise Roosendaal, CAE, Executive Director, Institute for Credentialing Excellence; and Mary Kate Cunningham, CAE, Senior Vice President for Public Policy, American Society for Association Executives — Co-Chair, Professional Certification Coalition. “These credentials are highly valuable for individuals seeking to advance in their careers and communicate to the public that certified professionals have met established standards for knowledge, skill, and competency in their fields. We are proud to support this legislation and look forward to working with Congress to ensure its enactment into law.”
According to the National Skills Coalition, middle-skill jobs — which require more than a high school education but not a bachelor’s degree — comprise the largest component of America’s labor market. However, key industries cannot find adequately-trained workers to fill these jobs.
Specifically, the bipartisan Freedom to Invest in Tomorrow’s Workforce Act would amend current law to allow workers and students to use their 529 plans to pay for training or credentialing programs recognized by a state government or the federal government — or widely recognized as providing reputable credentials in the occupation.
Simultaneously, the bill would maintain the current allowable uses for 529 plan expenses — such as colleges and vocational schools.
Click here to read the full bill text.