When HR 1 became federal law on December 22, 2017, it contained a provision that allows families to use 529 plans to pay for expenses for tuition in connection with enrollment or attendance at an elementary or secondary public, private, or religious school up to $10,000 per year, per beneficiary.

Pennsylvania has two 529 plans. The PA 529 Guaranteed Savings Plan allows families to save at today’s lower credit rates, with growth being based on tuition inflation. Thus, if a family saves enough for one semester at a state university today, they will have enough for a semester at that school in the future. The other plan, the PA 529 Investment Plan, provides returns on contributions that are based on investment performance of a family’s choice that range from aggressive to conservative.

As expected, the new provision has generated passionate responses that both criticize and praise the change.