Future Workforce Changes : Does saving for college still make sense?

AI is reshaping careers, education paths, and even how we define “school.” It’s only natural to wonder: “does saving for college still make sense???”

The answer isn’t to abandon planning, it’s to broaden how we think about it. Education isn’t disappearing, it’s diversifying, and college is no longer the only path. Learning still carries a cost which is why 529 plans have quietly evolved. They can now be used for trade schools, certifications, specialized training, apprenticeships and k-12 tuition, within limits.

New flexibility reduces the “what if” risk. With recent rule changes, unused funds may be eligible for a Roth IRA rollover (within limits and conditions).

AI may increase the value of adaptability-not eliminate education

The future likely requires more reskilling, not less. 529 plans are often boxed into “college tuition,” but the rules are broader and a few options surprise even financially savvy families.

Here are some of the lesser-known (but legitimate) ways to use a 529:

1. Apprenticeships (Not Just College)

You can use 529 funds for approved apprenticeship programs registered with the U.S. Department of Labor. That can include: Electrician programs, Plumbing apprenticeships, HVAC training. This covers things like fees, books, and required equipment -great for kids pursuing skilled trades instead of a 4-year degree.

2. Student Loan Repayment (With Limits)

Thanks to the SECURE Act: You can use up to $10,000 (lifetime) per beneficiary to pay student loans. You can also use $10,000 for each sibling. Caveat: You can’t double dip—interest paid with 529 funds isn’t eligible for the student loan interest deduction.

3. K–12 Tuition (Private Schools)

529s can be used for K–12 tuition, not just college. Up to $20,000 per year per student. Only for tuition (not uniforms, transportation, etc.) This can be powerful for families considering private or religious schooling earlier in life.

4. Study Abroad Programs

If your child enrolls in a qualifying school, 529 funds can often be used for Study abroad tuition, housing and meals (if part of the program). The key: the program must be affiliated with an eligible institution.

5. Technology & Equipment

You can use 529 funds for: Laptops, Software, Internet access (if required for school) This became especially relevant with remote learning.

6. Off-Campus Housing (With Rules)

You don’t have to live in a dorm. Rent and utilities can qualify BUT only up to the school’s published cost of attendance allowance. Go over that limit, and the extra becomes taxable.

7. Culinary, Trade, and Non-Traditional Schools

Eligible schools aren’t just universities. Many programs qualify if they participate in federal student aid programs (Title IV), including: Culinary institutes, Cosmetology schools, Technical training programs

8. Changing the Beneficiary

You can transfer a 529 to another family member: Siblings, cousins, even yourself! This turns a 529 into a multi-generational planning tool, not just a single-child account.

9. Rolling Over to a Roth IRA (New + Underused)

Starting in 2024: You can roll unused 529 funds into a Roth IRA. Lifetime max: $35,000. Must meet certain conditions (account age, earned income, etc.) This is one of the most powerful “escape hatches” if overfunding happens.

What You Still Can’t Use It For: (A few common misconceptions): Student loan payments above the limit, travel not tied to school, K–12 expenses beyond tuition, Insurance or medical costs, strategic Insight.

Most people think of 529s as education-only buckets.

But used creatively, they can become:

• A career flexibility fund (college OR trades)

• A tax-advantaged family pool of capital 

• A backup retirement starter via Roth rollover

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PLEASE NOTE: 529 plans come with fees and expenses, and there is a risk they may lose money or underperform. Most states offer their own 529 programs, which may provide benefits exclusively for their residents. Please consider whether the state plan offers any tax or other benefits. Tax implications can vary significantly from state to state. State tax treatment of K-12 withdrawals is determined by the state(s) where the taxpayer files state income tax. Please consult wit a tax advisor for further guidance. Unless certain criteria are met, Roth IRA owners must be 59 ½ or older and have held the IRA for five years before tax-free withdrawals are permitted. Additionally, each converted amount may be subject to its own five-year holding period.