Pending legislation proposes to align Missouri’s college savings plan rules with federal law to allow 529 investment accounts to pay for up to $10,000 in student loans as well as apprenticeship costs.
SB 152 was introduced by Sen. Denny Hoskins (R-District 21) while HB 478 is sponsored by Rep. Phil Christofanelli (R-St. Charles).
“The Chamber views apprenticeships as vital job training pathways for getting people back to work as a way to help us strongly recover from the pandemic,” said Kara Corches, director of legislative affairs with the Missouri Chamber of Commerce and Industry. “We think they are critical because apprenticeships offer paid on-the-job training with classroom instruction to prepare workers for the highly skilled careers of tomorrow.”
If passed, SB 152 and HB 478 would both modify the definition of an eligible educational institution as defined in Section 529 of the Internal Revenue Code, such as college, university, or trade school.
“Missouri is actually a top 10 state for tech job growth,” Corches told St. Louis Record. “We ensure this by making sure we have the workforce to meet those needs and Missouri is leading the nation in apprenticeships. We ranked second in the nation in new apprenticeships.”
SB 152 is expected to be approved by the end of the session, according to Corches.
“We have the two primary vehicles that started out this legislative session but now this language that expands the 529 plans in Missouri has been tacked on to about ten bills,” Corches said in an interview. “So, it's in a lot of moving pieces but the primary vehicle SB 152 passed out of the Senate, was already heard in a policy committee in the House and hopefully should be voted out of the policy committee this week.”
Currently, the state's 529 college savings program is more restrictive than what is allowed by the federal government. If the proposed legislation passes, parents would be permitted to use 529 funds to pay for another child’s student loans up to $10,000.
“It would be a great thing because when a parent is making that decision to start investing in a 529 plan, there is always the risk that your child may not attend a traditional educational institution but now with apprenticeships being as broadly used as they are today, it's okay if your child doesn't necessarily go to a four-year institution,” Corches said. “Perhaps they will join an apprenticeship and you can utilize those funds that way.”
Federally approved apprenticeship programs include advanced manufacturing, phlebotomy, nursing, IT computer programming, network support, and cybersecurity.
“These are jobs that are very highly paid career pathways,” Corches said. “They are not minimum wage jobs. They start at $60,000 and up. Students get paid on the job to learn this new skill.”
Currently, parents in Missouri are permitted to invest up to $325,000 in 529 college savings accounts.
“It seems to be a bipartisan piece of legislation,” Corches added. “Anything related to workforce development spans across the aisle. Both Republicans and Democrats really want to bolster our workforce and get people back to work.”