What Comes Next—Freedom to Invest in Tomorrow’s Workforce Act

On July 4, the Freedom to Invest in Tomorrow's Workforce Act was signed into law as part of the One Big Beautiful Bill Act. This expansion of 529 education savings plans marks a major win for NSPE members. The new law strengthens support for engineers throughout their careers and benefits the wider workforce that depends on technical credentials.

A 529 plan is a tax advantaged savings account, somewhat like a retirement account, but designed for education. Money invested in a 529 grows tax free, and withdrawals are also tax free when used for qualified expenses. Until now, those expenses were limited mainly to tuition and fees at colleges and universities.

What the New Law Means
For engineers and those preparing to enter the profession, this expansion provides a new tax advantaged way to plan for professional development. For the first time, 529 education savings plans can be used not only for traditional tuition but also for expenses tied to licensure and credentialing. That includes costs such as exam fees, renewals, continuing education, and required materials. This change recognizes the modern economy's reliance on rigorous technical credentials and gives professionals more flexibility to invest in their careers at every stage.

Implementation and Guidance Ahead
Although the law is now in place, federal agencies still need to determine how its provisions will be applied in practice. The IRS, working with the Department of Labor, will be responsible for issuing guidance to clarify which expenses qualify, how documentation should be handled, and when families will be able to begin using 529 funds for credentialing costs.

The statute already identifies eligible expenses such as tuition, fees, books, supplies, testing fees for obtaining or maintaining a credential, and continuing education required for licensure or certification. It also points to a broad range of recognized credentials, including state-issued professional licenses, certifications accredited by the National Commission on Certifying Agencies (NCCA) or the American National Standards Institute (ANSI), credentials listed in the Department of Defense COOL directories, and registered apprenticeships.

While the expansion is technically effective immediately - meaning withdrawals made after July 4, 2025, can qualify - there will be a transition period. State 529 programs may need to update their systems or even pass conforming legislation, and the IRS is expected to provide interim guidance before full regulations are finalized. Engineers should anticipate some variation between state programs in the near term and keep records of any qualifying expenses in case of audit.

How Engineers Helped Make It Happen
This legislative victory is the product of years of steady advocacy and collaboration. NSPE worked through the Tomorrow's Workforce Coalition, a broad alliance of credentialing, certification, and professional organizations committed to expanding access to high-quality credentials. Together, coalition partners consistently made the case that 529 savings plans should reflect the realities of today's workforce, where rigorous technical credentials are just as essential as traditional college degrees.

As part of this effort, NSPE engaged directly with congressional offices, providing the engineering profession's perspective on why licensure and continuing education matter for protecting the public health, safety, and welfare. Over the years, thousands of NSPE members added their voices through grassroots outreach, sending messages and making phone calls to their lawmakers and reinforcing the importance of this change from every corner of the country. State societies played a direct role with their own outreach, emphasizing how expanded 529 flexibility supports the engineering pipeline and strengthens local communities.

Through this combination of coalition advocacy, direct engagement, and member participation, NSPE helped secure broad bipartisan support for the Freedom to Invest Act, ensuring its inclusion in the final legislative package signed into law.

What Members Can Do Now
While federal agencies finalize guidance, members can begin thinking about how the expanded use of 529 savings might support their own licensure or continuing education, or those of future engineers in their families. NSPE will provide resources, FAQs, and regular updates as implementation moves forward to ensure every member understands how to take advantage of this important change.

Thank You for Making a Difference
This achievement would not have happened without NSPE members who reached out to lawmakers, shared their experiences, and highlighted the importance of licensure and continuing education. Every message, phone call, and meeting added weight to the case for change and helped secure bipartisan support. Member engagement showcased the profession's collective strength and its commitment to protecting the public, and it will remain just as essential in shaping future policy victories.