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Expanding Educational Opportunities and Pathways Across America

September 3, 2025

How changes to federal aid programs and 529 plans create flexibility for more learners

Recent changes and updates to programs and regulations that determine how students and families can finance postsecondary education hold the potential to truly expand the postsecondary pathways-and K-12 options-available to families. From new federal Workforce Pell Grants to more flexibility for 529 plans, the education landscape will undoubtedly see additional shifts in how families exercise choice and finance their education options.

Why Now?

These updates come amidst a growing desire for new postsecondary education pathways, continued examination of the credentials most valuable for jobs, and an urgent need to fill roles in major sectors like healthcare and technology. As industries shift and restructure, more people will need flexible, affordable options that can lead to career-aligned credentials. While traditional four-year college or advanced degrees are still the right path for many individuals, many well-paying jobs do not require that level of education for a person to be prepared and successful.

Just as one size does not fit all when it comes to learning, neither does one plan for how to finance it. No two individuals or families have the same financial circumstances, but we all share the same need to gain education and credentials that lead to upward mobility. Prior to these changes, many families were restricted to a limited number of options for financing educational expenses, particularly for postsecondary education.

What to Know

New Workforce Pell Grants: Starting July 1, 2026, Workforce Pell Grants, which are federally funded, can be used for accredited, short-term workforce-training programs for individuals with or without a bachelor's degree. Whereas traditional Pell Grants have been awarded to low-income college students pursuing traditional degrees, the Workforce Pell Grants benefit individuals who want to go straight to the workforce after high school or those in different stages of life who need credentials to attain in-demand, well-paying jobs.

The changes to eligibility for these funds aim to create greater opportunity for more learners at various points in their educational journeys to leverage resources that can cover indirect education expenses. A prorated amount will be awarded based on the hours worked, credits, and length of the program. Workforce Pell will be determined by income level, which means eligible students must still submit the Free Application for Federal Student Aid (FAFSA).

FAFSA: While you'd be hard-pressed to find big fans for filling out FAFSA, particularly since the recent rollout debacle, the reality is more changes are coming and it remains a requirement for everything from applying to college to accessing funding. Those going through the process may find heightened competition for funds as Workforce Pell Grants will be also awarded through the form. Tools like the Federal Student Aid Estimatorare helpful resources to understand new guidelines.

Federal Student Loans: The passage of the One Big Beautiful Bill (OBBB) brought revisions to the federal student loan program's borrow limits and loan terms, in some instances. The GraduatePLUS Loan will end after this year. The National Association of Student Financial Aid Administrators has a detailed chart of all the changes and conditions.

For those looking to find ways to reduce or eliminate dependency on student loans, grants, scholarships, work-and-learn programs, and tax-incentized savings plans will continue to be important. These resources can reduce the cost of postsecondary education and the overall financial burden for individuals and families who need that support.

529 Plans: These tax-advantaged savings plans have seen increased benefits over the last decade, with different plan structures from growth accounts to prepaid tuition plans, like the Private College 529 Plan. These plans allow individuals and families to maximize their investments through growth in the market or securing lower tuition rates years ahead of college.

The OBBB made 529 funds eligible for certain K-12 education expenses, so families can now use these funds to pay for a wide variety of supplemental resources such as career and technical education programs, resources for learning disabilities, tutoring, and college-entry exams. If a 529 plan was opened for a child at birth, there may be funds available for critical supports that help them succeed in K-12 and stay on track for whatever postsecondary path they choose. Additionally, recent updates from the SECURE 2.0 provision allows remaining 529 funds to be rolled over into a Roth IRA for retirement.

What to Watch For

Many of the changes will make it easier for more Americans to access the educational opportunities that best meet their needs, while others expand benefits for families who want to plan for their future. As these changes take effect, we can anticipate further shifts across the educational landscape including:

1. Updates to federal financial aid requirements, such as continued updates to FAFSA, changes in student loan terms, and eligibility conditions for both individuals and accredited educational programs.
2. Major shifts across community colleges and four-year institutions as they expand their offerings to include more short-term workforce training programs.
3. Increases in 529 plans to support K-12 education expenses and resources not provided by their schools, particularly in terms of wraparound support or private school tuition.

Flexibility is key to access and equity within education. While policy changes and rollouts will always leave room for continued improvement, the revisions increase options for students and families as they navigate the evolving landscape of educational pathways.

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POSTED BY: Kate Johnson