529 updates in ‘One Big, Beautiful Bill’ give South Carolina families even more flexibility for educational savings

By State Treasurer Curtis Loftis

As administrator of South Carolina’s Future Scholar 529 Plan, I’m happy to share that recent passage of the One Big, Beautiful Bill Act spells good news for South Carolina families who are using tax-advantaged 529 savings plans to save for their children’s education. The bill expands qualified uses for 529 funds, providing greater flexibility for families and makes an already effective program even more beneficial.

529 plans are education investment accounts named for a section of the IRS tax code which outlines their numerous tax benefits. First, when you save for education with a 529 plan, contributions to your account grow tax-free, meaning the earnings aren’t taxed at the state or the federal level. In addition, when it’s time to use your funds, your withdrawals for qualified education expenses won’t be taxed either. And in South Carolina, anyone who contributes to a 529 plan can deduct 100% of the contributions from their income on their SC tax return. That’s why, for South Carolina families, saving with a Future Scholar 529 plan is clearly a win-win-win.

Along with impressive tax benefits, Future Scholar’s flexibility has long set South Carolina’s 529 plan apart from other financial products in the marketplace. The expansion of qualified uses in the One Big, Beautiful Bill Act further increases flexibility and makes Future Scholar an even better choice, particularly in two key areas:

New K-12 uses approved

In 2017, Congress passed changes that allowed the use of 529 funds for up to $10,000 in tuition per year at K-12 private, public and religious schools.  With the recent passage of the One Big Beautiful Bill Act of 2025, additional K-12 expenses are now qualified withdrawals from a 529 account. This means funds in a Future Scholar 529 account can now be used to pay for things like curriculum, books, online educational materials, tutoring or supplemental educational classes that are available outside the home, fees for nationally standardized tests (SAT, ACT, AP, etc.) and dual-enrollment fees for college courses taken in high school.

The legislation also increases the annual withdrawal limit for qualified K-12 expenses from $10,000 to $20,000 per year beginning in 2026.

In addition, educational therapies for students with disabilities are also included as a qualified withdrawal. For these families who often face significant expenses, the flexibility to use tax-advantaged savings could be a gamechanger, opening up more options for family finances.

Expanded coverage for career preparation and certifications

Young people have recently shown an increased interest in pursuing skilled trade professions that don’t require a traditional four-year college degree.  In addition to existing qualified expenses like tuition at community, trade and vocational schools, and through registered apprenticeship programs, the new law considers a wide range of expenses related to workforce credentials. New career-focused qualified expenses cover associated fees, books, supplies, and required exam costs for programs that appear on a state or federal Workforce Innovation and Opportunity Act list and the Veteran Affairs’ WEAM database (which verifies if a school or program is eligible for VA benefits).

Students can also use funds to prepare for an industry-recognized credential or licensing exam. Continuing-education fees required to keep a credential active will qualify, too. And the benefit goes beyond tradespeople. It also includes attorneys, accountants, cosmetologists, engineers and healthcare professionals, among others.

The case for Future Scholar

Over 240,000 people are currently using South Carolina’s Future Scholar 529 Plan to save in preparation for the growing costs associated with their children and grandchildren’s future education. Over the years, Future Scholar has helped thousands of families saving for everything from K-12 education to post-secondary degrees avoid taking on expensive student loan debt to achieve their dreams. With the average size of student loan debt in the Palmetto State currently hovering around $39,000, there can be no doubt saving with Future Scholar makes good financial sense.