On June 21, 2018 Sen. Ted Cruz (R-Texas) introduced the Student Empowerment Act as an enhancement to his Student Opportunity Amendment, which was signed into law in December 2017 and allows families to use 529 plans to pay for K-12 tuition.
The new legislation expands the current legal definition of ‘qualified higher education expenses’ to include the following elementary, secondary and homeschool expenses:
- Curriculum and curriculum materials
- Books and other instructional materials
- Online education materials
- Tuition for tutoring or educational classes outside of the home when the teacher is licensed, has taught at an eligible institution or is a subject matter expert in the topic
- Fees for standardized tests (SAT and ACT), AP exams, or any exams related to college or university admission
- Fees for dual enrollment
- Costs of educational therapy for students living with disabilities in connection with enrollment or attendance at, or for students currently enrolled in or attending, a private, public or religious elementary or secondary school, including:
- Occupational therapy
- Behavioral therapy
- Physical therapy
- Speech-language therapy
Sen. Cruz believes these provisions will give families from all income levels a better opportunity to save money throughout a child’s education. He proposed including homeschool expenses in his original Student Empowerment Act, but this provision was not included in the final Tax Cuts and Jobs Act. According to Sen. Cruz, this bill “rights that wrong, by re-including homeschool families as equally eligible to use a 529 savings account for educational expenses, to ensure that all families are able to use these tax-advantaged accounts to pay for their child’s elementary and secondary education.” The new provisions would apply to 529 plan distributions made after December 31, 2018. View the bill here.
