US President Donald Trump on Monday, 25 August 2025, announced that families can now use 529 education savings accounts to cover home-schooling expenses for the first time, while also doubling the annual withdrawal limit for elementary and secondary education costs to $20,000. The move, enacted through the One Big, Beautiful Bill Act signed on 4 July 2025, marks a significant broadening of who can benefit from tax-advantaged education savings in the United States.

What Changed Under the New Law

Previously, 529 plans — state-sponsored, tax-advantaged savings programmes — were primarily associated with college costs, with limited provisions for K-12 expenses. The One Big, Beautiful Bill Act now permits families to draw on these accounts for home-schooling costs, private school tuition, and religious school fees. The annual withdrawal cap for elementary and secondary education has been raised from $10,000 to $20,000.

'As part of the great, big, beautiful bill, we have massively expanded 529 education saving accounts tremendously, doubling the annual withdrawal cap from K-12 expenses to $20,000 a year,' Trump said at a back-to-school event held in the White House Rose Garden.

A Home-Schooling Family at the White House

To illustrate the policy's real-world impact, Trump invited a home-schooling family from Jacksonville, Florida, to the Rose Garden event. The father, identified as Hubert, said he and his wife, Marina, had home-schooled their three children for roughly a decade — their eldest entering ninth grade, their daughter entering sixth grade, and their youngest son beginning third grade.

Hubert noted that he himself had been home-schooled from kindergarten through Grade 12 after his parents made that decision in 1988. 'Being able to have the extra resources to provide them with their needs, and also the option to support our children in the way that we see fit, means the world,' he said. He also pointed out that many home-schooling families depend on a single income because one parent takes on teaching responsibilities full-time.

Education Freedom Tax Credit and Other Provisions

Trump linked the 529 expansion to the Education Freedom Tax Credit, a separate provision within the same legislation. The credit allows taxpayers to receive up to $1,700 for contributions to non-profit organisations that provide scholarships covering tuition, books, and other basic educational expenses at public, private, or religious schools.

Education Secretary Linda McMahon framed the broader policy shift in terms of parental authority. 'Children belong to their parents, not the federal government,' McMahon said at the event.

Children's Investment Accounts and Private Commitments

Trump also highlighted newly created investment accounts for children, saying every eligible newborn would receive $1,000. He cited more than $6 billion in private commitments from philanthropists Michael and Susan Dell in support of education-related initiatives under the legislation.

What This Means Going Forward

The expansion reflects a broader administration push to redirect education funding away from traditional public school structures and toward family-directed choices. Critics of such school-choice measures have argued in the past that tax advantages flowing to private and home-schooling options can reduce resources available to public schools, though the administration has not addressed that concern directly. With the law already signed, families can begin planning 529 withdrawals for home-schooling costs under the new $20,000 annual cap immediately.