Say you start saving for your child’s future education when they’re little, thinking “college tuition.” Fast forward, and you discover those dollars can also cover tutoring in high school, an apprenticeship, or even a shot at paying off student loans. That’s the evolution of the 529 plan and thanks to the One Big Beautiful Bill Act (OBBBA), signed on July 4, 2025, the rules just got better.

Supercharging Contributions

Contributions to a 529 plan are considered gifts. That means in 2025 you can give up to $19,000 per beneficiary without dipping into your lifetime gift exemption. But here’s where it gets interesting - you can “front-load” five years at once. So instead of putting in $19,000 a year, you could drop in $95,000 in 2025 and have it spread across five years of gifts. For grandparents looking to shift wealth while helping grandkids, that’s a powerful tool.

What Counts as Tax-Free Spending

Most people know 529s cover tuition, books, and dorm costs for college. But the definition of “education” has grown. Funds can also be used for:

• off-campus housing (up to the school’s allowance),

• computers,

• internet access, and even

• certain apprenticeship programs.

OBBBA added another layer: starting with distributions after July 4, 2025, K–12 expenses expand beyond tuition. That means 529 dollars can now cover books, curricula, online programs, test prep fees, tutoring, and even educational therapies for students with disabilities.

Beginning in 2026, the annual tax-free withdrawal limit for K–12 tuition doubles to $20,000 per beneficiary.

When Plans Change

What if your child decides college isn’t for them or you simply end up with leftover funds? The money doesn’t have to sit there gathering dust. Options include:

• Paying up to $10,000 of the beneficiary’s student loan debt (lifetime cap).

• Rolling funds into another family member’s 529.

• Transferring to an ABLE account for a disabled sibling or beneficiary.

• Moving some funds into a Roth IRA (lifetime cap $35,000), as long as the 529 has been open for 15 years.

That last one is a game-changer. It turns “college-only savings” into a head start on retirement, with growth moving tax-free into a Roth.

Why This Matters Now

OBBBA didn’t reinvent 529s but it made them more flexible, more family-friendly, and frankly, more interesting. Instead of worrying about whether your child will use it for college, you can feel confident that these dollars can follow them through different stages of education and even into adulthood.

Imagine this: you front-load $95,000 in 2025 for your granddaughter. She uses part of it for private high school, later taps it for college tuition, and when she graduates with leftover funds, $20,000 slides into her Roth IRA to start her retirement savings. One account, three stages of life covered.

That’s the real beauty of the new 529 landscape after OBBBA.