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Measure Would Expand Use of College Savings Plans for Skilled Jobs that Don’t Require Degrees
WASHINGTON, D.C. – U.S. Senator Cindy Hyde-Smith (R-Miss.) this week cosponsored legislation to expand the use of 529 educational savings accounts beyond current limits that only permit workers and families to use these accounts to pay for college, university, and vocational school expenses.
The bipartisan Freedom to Invest in Tomorrow’s Workforce Act (S.722) would allow Americans to use tax-preferred 529 funds for skills training, credentialing, and certification programs for middle-skilled jobs that don’t require a two- or four-year degree. A 529 savings plan is a state-sponsored education savings vehicle that is exempt from federal taxes if funds are used to pay for qualified education expenses.
“This legislation recognizes that most Americans work in jobs that require a high school education and some skills training, but not necessarily a college or university degree. We want more families and workers to be able to take advantage of 529 savings to advance their careers,” Hyde-Smith said. “I think many Mississippians could benefit from broader access to workforce development and skills training programs as our state grows its manufacturing and other industry sectors.”
S.722 would allow the use of 529 savings for postsecondary training and credentialing programs covered in Section 122(d) in the Workforce Innovation and Opportunity Act (WIOA). These occupations, which require some level of certification, run the gamut from manufacturing and construction to agriculture to tech to healthcare.
The Mississippi Department of Employment Security administers an Eligible Training Provider List, which includes courses currently covered by the WIOA that would also be covered under a 529 savings account with the passage of the Freedom to Invest in Tomorrow’s Workforce Act.
U.S. Senators Amy Klobuchar (D-Minn.) and Mike Braun (R-Ind.) introduced this legislation, which is also cosponsored by U.S. Senators Tammy Duckworth (D-Ill.), Susan Collins (R-Maine), Dianne Feinstein (D-Calif.), Joe Manchin (D-W.Va.), Martin Heinrich (D-N.M.), Peter Welch (D-Vt.), and Tommy Tuberville (R-Ala.). The bill has been referred to the Senate Finance Committee.
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