This Secret 529 Rule Could Pay for Your Teen’s Test Prep–Here’s How!

How New 529 Plan Rules Can Help Families Pay for Test Prep and College Readiness

By Dr. Shaan Patel, CEO & Founder of Prep Expert®

For decades, 529 college savings plans have been a smart way for families to set aside money for higher education. But their use was limited, covering tuition, fees, and other traditional college expenses.

That just changed. Thanks to recent legislation, 529 funds can now be used for tutoring, SAT/ACT prep classes, and even exam fees. This is a game-changer for students aiming to boost their test scores and strengthen their college applications.

As someone who has spent my career helping students maximize their academic potential, I believe these changes open the door for more equitable access to high-quality test prep and academic support. Here’s what you need to know.

What Changed, and Why It Matters

The Big Beautiful Bill passed earlier this year expanded the definition of “qualified education expenses” under 529 plans. This now includes:

• Tutoring services outside of the home.
• College prep courses, including SAT and ACT preparation.
• Fees for standardized college admission tests like the SAT and ACT.

Why is this significant? Because test prep is often the missing piece in a student’s college readiness journey. Strong scores can increase admissions chances and unlock thousands in merit-based scholarships. But until now, many families couldn’t tap into their 529 savings for these costs, meaning they either paid out-of-pocket or skipped professional prep altogether.

How This Benefits Students and Families

The biggest winners here are middle-class families, those who may not qualify for need-based aid but still find college costs overwhelming. Now, they can:

1. Offset high test-taking costs – Students often take the SAT or ACT multiple times to improve their scores. At $100 or more per test, that adds up quickly.
2. Access professional tutoring – Families can now fund subject tutoring to strengthen weak academic areas before college.
3. Invest in strategic prep programs – Structured SAT/ACT prep courses like those offered at Prep Expert® can now be paid directly from 529 accounts or reimbursed.

For students aiming for competitive schools or top scholarship awards, this funding flexibility can make all the difference.

The Catch: State Plans Need Time to Catch Up

While federal rules now allow this broader use of 529 funds, many state administrators haven’t yet updated their systems. That means you might not see “test prep” or “tutoring” listed on your state’s approved expense list just yet.

Here’s my advice:

• Check your state plan’s reimbursement process. Many allow you to pay out-of-pocket and then submit receipts for eligible expenses.
• Document everything. Keep receipts for courses, tutoring sessions, and test registration fees in case your state plan requires verification.
• Communicate directly. Call your state’s 529 plan office to confirm the reimbursement process before making large payments.

The rules are in place, but the rollout will take time.

How to Maximize the New 529 Plan Rules

If you want to take full advantage of these changes, here’s a smart approach:

1. Plan early. If your student is a sophomore or junior, start budgeting now for test prep.
2. Choose high-ROI programs. Look for courses with proven score improvements, like those at Prep Expert®, to ensure your 529 funds are well spent.
3. Schedule strategically. Aim to complete prep before peak testing periods to maximize readiness.
4. Combine with scholarships. Higher test scores often translate into more merit aid, further stretching your education dollars.

Why This Change Levels the Playing Field

Access to professional test prep has historically been unequal. Students from higher-income families could afford premium tutoring, while others had to rely on free resources and self-study.

By allowing 529 funds to cover test prep and tutoring, more families can now afford the same quality preparation, leading to:

• Stronger college applications across a wider range of students.
• Greater scholarship eligibility for those who improve their scores.
• A more level admissions playing field.

In my view, this is one of the most practical and impactful education policy changes in recent years.

Final Thoughts

At Prep Expert®, we’ve worked with students who saw their SAT scores jump by hundreds of points—changes that directly impacted where they got in and how much they paid for college.

Now, with 529 plan flexibility, more families can invest in these life-changing opportunities without taking on extra financial strain.

If you’re a parent or student, I encourage you to explore how your 529 savings can now be used to strengthen your academic profile. Because the reality is simple: better preparation leads to better outcomes.

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Dr. Shaan Patel is a Shark Tank winner, bestselling author, and founder of Prep Expert®, an education company that has helped over 100,000 students improve test scores, win scholarships, and gain admission to top universities. He scored a perfect SAT and is passionate about expanding access to education worldwide.