Freedom to Invest in Tomorrow’s Workforce Act
The Freedom to Invest in Tomorrow’s Workforce Act would expand the use of 529 college savings accounts. It adds “qualified postsecondary credentialing expenses” to the list of expenses that can be paid with tax-free 529 funds. This means up to now eligible costs for degrees or other higher education could also cover certain credentialing activities—such as tuition, required books and supplies, testing fees, and continuing education required to maintain a credential—for programs recognized as legitimate postsecondary credentials. The bill defines what counts as a recognized program and a recognized credential, tying eligibility to federal workforce and credentialing frameworks (like WIOA lists, the WEAMS directory, accreditation, and government-recognized licensing). The amendments would take effect for distributions made after the enactment date.
Key Points
- 1Adds “qualified postsecondary credentialing expenses” to 529 plan rules, allowing these costs to be paid tax-free from 529 accounts.
- 2Qualified expenses include:
- 3- Tuition, fees, books, supplies, and equipment necessary for enrollment or attendance in a recognized postsecondary credential program (and other related costs if they would be covered for a traditional higher education cost).
- 4- Fees for testing required to obtain or maintain a recognized postsecondary credential.
- 5- Fees for continuing education required to maintain a recognized postsecondary credential.
- 6Defines a “recognized postsecondary credential program” through multiple criteria, including:
- 7- State lists prepared under the Workforce Innovation and Opportunity Act (WIOA) and inclusion in the WEAMS directory.
- 8- An examination required to obtain/maintain the credential, with the program recognized by a reputable credentialing organization.
- 9- A designation by the Secretary (in consultation with the Secretary of Labor) identifying reputable programs.
- 10Defines a “recognized postsecondary credential” to include:
- 11- Industry-recognized credentials (accredited by recognized bodies like ICE, NCCA, ANSI; or listed in the DoD COOL directory; or other Secretary-identified credentials).
- 12- Apprenticeship certificates registered with the Secretary of Labor.
- 13- Occupational or professional licenses or certifications recognized by state or federal governments.
- 14- Other credentials defined in WIOA that are provided through eligible programs.
- 15Effective date: the amendments apply to distributions made after the enactment date.