New Law Expands Uses for 529 College Savings Accounts

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Under the Secure Act, approved in December, up to $10,000 can be used to repay student loans. The law also allows 529 funds to be used for apprenticeships.

Under the new rules, up to $10,000 from a 529 account can be used to repay the beneficiary’s student loans. Plus, up to another $10,000 each can be used to repay student loans held by the beneficiary’s siblings. (If, say, a student had two siblings with student loans, another $20,000 total could be withdrawn, without penalty, to pay their debt.)
The new law also allows 529 funds to be used to pay for apprenticeships, which typically combine on-the-job training with classroom instruction, often at a community college. To qualify, the apprenticeship must be registered with the federal Labor Department.

Before the recent spate of changes, 529 savings plans were limited to paying for costs like tuition, fees, housing, meal plans, books and supplies.

The College Savings Plans Network says there are about 14 million open 529 accounts holding an average of $25,000 each.

It's best not to incur debt but, if you do, these seem like common-sense changes and should be helpful.