A new federal law, The SECURE (Setting Every Community Up for Retirement Enhancement) Act, expands the definition of qualified higher education expenses that can be paid for with 529 funds.
- 529 funds can now be used to cover registered apprenticeships as qualified higher education expenses, as well as fees, books, supplies and equipment required for participation. To qualify, apprenticeships must be registered and certified with the Secretary of Labo.
- 529 funds are now eligible to repay qualified education loans. This includes amounts paid—as principal or interest—on any qualified education loan of the beneficiary, or a sibling of the designated beneficiary. Withdrawals for loan repayments are limited to $10,000 in distributions from all 529 accounts. Distributions to a sibling would also have a $10,000 limit. However, the account owner cannot use 529 funds to repay interest on a qualified loan and still claim a tax deduction for student loan interest.
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