Apprenticeship programs provide an affordable pathway to a career, but they still come with costs. Thanks to the 2019 SECURE Act, funds saved in a 529 college savings plan can be used to cover qualified apprenticeship expenses, such as fees, textbooks, supplies, and necessary trade tools.
529 Plans & Apprenticeship Programs
Students develop different goals and interests over the years, so families unsure of a student’s future education and career path can be assured that funds saved in a 529 plan offer flexibility. Money saved can be used to support a variety of postsecondary aspirations, including attendance at eligible trade, tech, or vocational schools, community colleges, and traditional four-year universities – nationwide and abroad – as well as registered apprenticeship programs.
What is a Registered Apprenticeship?
An apprenticeship is an “earn while you learn” program combining on-the-job training and classroom instruction. Employers provide hands-on skill development, while technical or community colleges or private training centers teach theoretical knowledge. If an apprenticeship program is certified and registered with the Secretary of Labor, you may use funds saved in a 529 account to pay for related program fees, textbooks, supplies, and equipment.
There are over 24,000 apprenticeship programs nationwide, according to the U.S. Department of Labor. Programs cover a wide range of industries, with an average annual salary for those who complete their apprenticeship of $70,000. Apprenticeship availability varies, depending on the local employers involved. For example, in Wisconsin, employers train approximately 10,000 individuals annually through apprenticeship programs in about 200 occupations – from construction and manufacturing to healthcare and information technology.
Using a 529 Account: A Case Study from College to Apprenticeship
Kim Sebastian from Greendale, Wisconsin, originally opened 529 accounts for her children, expecting them to pursue traditional college degrees. Over the years, she continued contributing to their 529 accounts until they graduated from high school.
Cole, their eldest son, started at a four-year university but soon realized that the conventional college experience wasn’t the right fit for him. After exploring different options, he discovered a passion for electrical work and decided to pursue an apprenticeship instead.
“We looked into how we could use the 529 funds to support his apprenticeship,” Kim says. Though initially focused on funding a traditional college education, the flexibility of the 529 plan allowed the family to reallocate savings to support Cole’s new path. His apprenticeship led him to Waukesha County Technical College (WCTC), where he enrolled in the Associated Builders and Contractors (ABC Wisconsin) Electrical Apprenticeship program.
“I’ve always enjoyed working with my hands and figuring out how things work,” Cole explains. Combining practical experience with theoretical knowledge, the apprenticeship model suited him far better than a traditional college. This experience reflects a growing trend among students who, like Cole, are discovering the value of trade education.
Financial Support from 529 Plan
One of the key factors in Cole’s successful transition into the electrical field was the financial support provided by Wisconsin’s Edvest 529 college savings plan. The family was able to use the savings to cover the costs of tuition for his apprenticeship classes, as well as specialized courses in safety and first aid, such as OSHA certifications.
Cole notes, “Knowing that my family had saved for my education gave me a sense of security. I had the freedom to choose the career path that was right for me.” This financial backing allowed Cole to focus on his apprenticeship without worrying about educational expenses, highlighting the flexibility of the 529 savings plan beyond traditional college tuition.
By leveraging 529 savings plans, families can support a variety of educational paths, ensuring students have the resources needed to pursue careers that align with their passions and skills.
To learn more about how to use a 529 plan for apprenticeships, watch Edvest’s video: How to Use a 529 Plan for Apprenticeships.
Finding a Registered Apprenticeship Program
The following resources can assist in finding a registered apprenticeship program:
- U.S. Department of Labor – Apprenticeship USA
Apprenticeship.gov is a one-stop source to connect career seekers, employers, and education partners with apprenticeship resources. Use their search tool to find out if your apprenticeship program is registered. - Your state’s Department of Workforce Development
Many states have a Department of Workforce Development or similar agency that helps manage apprenticeship standards. Check with your state’s workforce agencies to find information about apprenticeship programs they support. - Your state’s community or technical college system
Many apprenticeships include classroom instruction through local colleges. Check with your state’s community or technical college system for apprenticeship opportunities they support.
By exploring these resources, individuals can find registered apprenticeships that align with their career goals and take advantage of the financial flexibility offered by 529 savings plans.
About the authors: Cheryl Rapp serves as a Wisconsin College Savings Program Finance Officer with the Wisconsin Department of Financial Institutions. With over 24 years of experience in state education initiatives, she previously served as a College Affordability Specialist and now leads outreach efforts to promote Wisconsin’s 529 college savings program. She is a graduate of the University of Wisconsin-Green Bay, from which she earned a bachelor’s degree in Humanistic Studies.
Chelsea Wunnicke serves as a Wisconsin College Savings Program Finance Officer with the Wisconsin Department of Financial Institutions. With a background in delivering Financial Capabilities Outreach and Education, Chelsea has a special interest in helping more Wisconsin communities and youth benefit from early saving for higher education. Chelsea holds a bachelor’s degree from Knox College and an M.P.A. from the University of Illinois Springfield.