This bill expands the use of 529 college savings accounts to cover K-12 educational expenses, including homeschooling costs, curriculum, tutoring, online resources, and educational therapies for students with disabilities. It aims to give parents more flexibility in funding their children's education.
Kevin Hern
Representative
OK-1
The "Student Empowerment Act" amends the Internal Revenue Code to allow 529 savings accounts to cover a broader range of K-12 educational expenses, including homeschooling costs. Qualified expenses include tuition, curriculum, books, online resources, tutoring, standardized tests, dual enrollment fees, and educational therapies for students with disabilities. These changes aim to give parents more flexibility in funding their children's education.
529 Savings Accounts Can Now Fund K-12 Private and Homeschool Expenses, Starting Immediately
The "Student Empowerment Act" just changed the rules for 529 savings accounts. These accounts, traditionally used for college savings, can now be tapped to pay for K-12 education expenses, including private school tuition and homeschooling costs. This law goes into effect immediately for any distributions made after its enactment.
Breaking Down the Changes
This bill expands what qualifies as a "qualified higher education expense" under Section 529(c)(7) of the Internal Revenue Code. Before, 529 funds were mostly limited to college costs. Now, families can use that money for a wide range of K-12 expenses. Think private school tuition, textbooks, online learning programs, and even tutoring (as long as the tutor isn't a family member and meets certain qualifications like being a certified teacher, per the bill's requirements). For families who homeschool, this means curriculum materials, books, and online resources are now covered. Even fees for AP exams or college entrance tests fall under the new rules.
Real-World Rollout
Imagine a family in Texas with two kids. One attends a private school, and the other is homeschooled due to a learning disability. Previously, their 529 account could only help with future college costs. Now, they can use those funds for private school tuition and for specialized educational therapies from a licensed provider, as outlined in the bill. They can also cover the costs of homeschooling materials for their other child. This provides immediate financial relief and more educational choices.
Potential Pitfalls
While the bill aims to empower families, there are some practical challenges. It could disproportionately benefit wealthier families, who are more likely to have 529 accounts and can afford private schools. This could lead to less funding for public schools if more families opt for private options. There's also a concern about oversight, especially with homeschooling expenses. It might be tricky to ensure the funds are genuinely used for education and not, say, a family vacation disguised as a "field trip." The bill doesn't specify how this oversight will work.
Connecting the Dots
This expansion of 529 plans builds on existing tax-advantaged savings options but significantly broadens their scope. While it offers flexibility, it also raises questions about equitable access to quality education and the potential strain on public school systems. The immediate effect is more options for families, but the long-term impact on the education landscape needs a closer look.