There is no question that college costs continue to rise, so many families are turning to 529 college savings plans to prepare for future expenses. What many parents don’t realize is that recent changes to federal law now allow 529 funds to be used for SAT and ACT test prep and tutoring—a powerful way to stretch those college dollars even further.
Below is a quick guide to what a 529 plan is, what changed, and how strategic test preparation can help your student earn scholarships and reduce overall college costs.
🎙️Listen to these conversations on New Ways To Use Your 529 Plan and 529 Savings Plans on the Tests and the Rest podcast.
🎓 What Is a 529 Plan?
A 529 plan is a tax-advantaged investment account designed to help families save for education. The funds grow tax-free, and withdrawals are also tax-free when used for qualified education expenses.
Traditionally, those expenses included:
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College tuition
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Fees
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Room and board
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Required books and supplies
These plans have become a core part of many families’ college-savings strategies because they help offset the rising cost of higher education.
🔄 What Changed in 2025?
Recent federal legislation significantly expanded the definition of a qualified education expense under 529 plans.
As of 2026, families can now use 529 funds for:
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SAT, ACT, and AP exam fees
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Standardized test prep courses
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Academic tutoring and enrichment programs
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Learning materials and supplemental instruction
This is a major shift from prior rules, under which 529 funds could not be used for tutoring or test preparation.
📚 Why Using 529 Funds for Test Prep Makes Financial Sense
Test scores can play a major role in:
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College admissions decisions
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Honors program placement
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Merit-based scholarships
Strong scores often unlock thousands—or even tens of thousands—of dollars in merit aid.
That means using a small portion of your 529 savings for test prep can:
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Increase scholarship opportunities
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Reduce overall college costs
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Help your savings go further
In other words, strategic test prep can turn a small investment into major long-term savings.
🧠 What Qualifies as Eligible Test Prep?
Under the new rules, 529 funds can typically be used for:
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SAT or ACT prep classes
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One-on-one tutoring
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Standardized test registration fees
There are a few requirements:
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The tutor cannot be a relative.
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The instructor should be a qualified educator or subject-matter expert.
Because implementation may vary by state plan, families should:
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Keep receipts for classes and tutoring.
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Check with their state’s 529 administrator.
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Consult a tax advisor for guidance.
💰 The Big Picture: Test Prep as a Scholarship Strategy
Here’s the key financial idea:
529 funds → test prep → higher scores → more scholarships → lower net college cost
For many families, especially those who don’t qualify for need-based aid, this can be one of the most effective ways to maximize their college savings.
📅 When Should Students Start?
A general timeline:
Sophomore year
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Take a diagnostic SAT/ACT
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Begin skill-building or light prep
Junior year
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Complete structured SAT or ACT prep
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Test in the spring or early summer
Senior year
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Retest if needed to maximize scholarship offers
Planning early helps families budget and make the most of their 529 funds.
📣 How Seeley Test Pros/ LEAP Can Help
At Seeley Test Pros/ LEAP, we help students:
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Identify the right test and timeline
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Build targeted score-improvement plans
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Prepare for scholarships and competitive admissions
And now, thanks to the new 529 rules, many families can use their existing college savings to pay for that preparation.
Questions about using 529 funds for test prep?
We’re happy to help you understand your options and build a strategy that maximizes both scores and savings.