New Uses for your Maryland College Savings Plan

New Uses for your Maryland College Savings Plan

February 24, 2020

The SECURE Act of 2019 (Setting Every Community Up for Retirement Enhancement) was signed into law as part of a government funding package on December 20, 2019, with overwhelming bipartisan support. The SECURE Act is the most comprehensive retirement savings package to become law since the Pension Protection Act of 2006.

The SECURE Act is wide-ranging, spanning nearly 40 provisions. The Act seeks to improve access to employer-sponsored retirement savings plans, increase savings levels within plans, streamline administration of plans, and provide for a wider range of options for generating retirement income, such as annuities.

There is even more flexibility in how you can use money saved in your Maryland 529 college savings plan. As of January 1, 2020:

You can now use 529 accounts to repay student loan debt - A 529 Account Beneficiary's student loan payments are now considered a qualified education expense, up to a $10,000 lifetime maximum. The beneficiary's sibling's student loan payments are also now qualified (also with a lifetime $10,000 cap).

529 Plans can now be used to pay for apprenticeships - Distributions from 529 Accounts used to cover certain apprenticeship programs are now also qualified distributions. To be considered a qualified 529 plan expense, the apprenticeship program must be registered and certified with the Secretary of Labor under section 1 of the National Apprenticeship Act.

This is great news that 529 plans can be used to pay for apprenticeship program expenses and as much as $10,000 over a person’s lifetime for student loan payments. Effective for all distributions beginning in 2019.