529 Plans in 2025: Paying Off Student Loans and Apprenticeships Still Allowed Despite Shutdown

With the government shutdown active, many families wonder which education benefits remain available.

The good news: 529 college savings plans are still active, and families can continue using them for student loans, apprenticeships, and future education needs.

Government shutdown is here, find out which benefits and assistance programs remain active today!
 

Using a 529 Plan for Student Loans

Under the SECURE Act of 2019, families can use up to $10,000 per beneficiary from a 529 plan to pay qualified student loans — tax-free.

Each sibling can also receive an additional $10,000, giving parents flexibility across multiple students.

However, remember that you can’t claim the student loan interest deduction on interest paid with 529 funds.
 

Benefits for Families

• Flexible use: Transfer unused funds to another child without tax penalties.

• Leftover savings: Repay student loans or save for future education expenses.

• Grandparent advantage: Delay withdrawals until after sophomore year to avoid reducing FAFSA aid.
   

Covering Apprenticeship Costs

529 plans can also pay for registered apprenticeship programs approved by the U.S. Department of Labor — including tuition, books, tools, and fees for trades like healthcare, IT, or construction.
 

New Opportunities Under SECURE 2.0

As of 2024, account holders can roll over up to $35,000 from a 529 plan into a Roth IRA, tax-free and penalty-free — if the 529 account is at least 15 years old.

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