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Parents flock to meetings on how to use 529 plans for private K-12 tuition

A parent listens during an information session on using 529 savings plans for private K-12 education at St. Pius X High School in Festus Tuesday.
Ryan Delaney | St. Louis Public Radio
A parent listens during an information session on using 529 savings plans for private K-12 education at St. Pius X High School in Festus Tuesday.

Parents with children in private schools are filling gymnasiums and cafeterias to learn how they can take advantage of a new tax break to save money on tuition.

Traditionally, so-called 529 plans were a way for parents to stash money away to pay for their child’s college education, without having to pay taxes on the gains. The federal tax overhaul plan enacted late last year changed rules around 529 plans so they can also be used to pay for private K-12 school tuition, up to $10,000 a year.

Many states also offer tax deductions for putting money in the accounts. In Missouri, those who contribute to 529s can deduct up to $16,000 for parents who file jointly.

In the past two months, Catholic and other parochial schools in the St. Louis area have brought in tax experts to explain changes to the savings plans. There’s been enough interest from parents that the Archdiocese of St. Louis is sponsoring a series of info nights over the next three weeks.

Learn more about how 529 plans work and what the expansion means

Assumption Parish School in south St. Louis County held one of the first information sessions in early February. Principal Jenn Sykora said parents began calling shortly after the law went into effect.

More than 125 families attended the session at the elementary school in Concord, including some from neighboring schools, Sykora said.

“I think when there’s money to be saved at hand, I don’t think it’s that hard to attract attention,” she said.

Still, while interest is high, school leaders don’t expect the changes made to 529 plans to lead to an increase in enrollment. Enrollment at Catholic schools has declined in recent decades, leading to the closure or consolidation of parish-run schools.

Sykora said she’s hearing from parents who already have children in the school.

“I wouldn’t say that it’s significant enough to change anybody’s mind about private education, but it definitely helps those parents who already have plans for, or already have their children enrolled, in private education,” she said.

Public school leaders, on the other hand, worry the policy change will lead parents to pour more money into the 529 accounts, meaning fewer tax dollars for the state and ultimately less funding for education. They also warn expansion of 529 plans will be a perk for wealthy families that’s still out of reach for low- and more middle-income families trying to pay for school.

“We oppose legislation that would gave tax credits for scholarship, tuition or vouchers to private schools, or voucher plans that would divert public funds to pay for private schools,” Aurora Meyer of the Missouri State Teachers Association told KCUR in January.

A parent asks a question about using 529 savings plans for private-school tuition during an information session at St. Pius X High School in Festus Tuesday night.
Credit Ryan Delaney | St. Louis Public Radio
A parent asks a question about using 529 savings plans for private-school tuition during an information session at St. Pius X High School in Festus Tuesday night.

At an event at St. Pius X High School in Festus on Tuesday night, many parents said they hoped to use the 529 saving plans to help make it easier for them to pay private tuition.

Angie Moran has one son at Twin City Christian Academy and a 4-year-old who will start there soon. She said affording the monthly tuition payments is “tight” but hopes opening a 529 plan will result in enough savings she can pay tuition up front, leading to an additional discount from the school.

“That money would be absolutely wonderful to put both kids in school,” Moran said.

The Archdiocese’s Information sessions on 529 plans will be held at the following schools. All sessions will be held from 6-7 p.m. and repeated from 7:30-8:30 p.m.

  • March 7 at St. Dominic High School in O’Fallon, Missouri
  • March 15 at Sacred Heart School in Florissant
  • March 15 at St. Monica Parish in Creve Coeur
  • March 15 at St. Francis Borgia High School in Washington
  • March 21 at Cardinal Rigali Center in Shrewsbury

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Copyright 2021 St. Louis Public Radio. To see more, visit St. Louis Public Radio.

Ryan Delaney works on the Innovation Trail project - covering technology, economic development, startups and other issues relating to New York's innovation economy.
Ryan Delaney
Ryan is a reporter on the education desk at St. Louis Public Radio, covering both higher education and the many school districts in the St. Louis region. He has previously reported for public radio stations WFYI in Indianapolis and WRVO in upstate New York. He began his journalism career working part time for WAER while attending Syracuse University. He's won multiple reporting awards and his work, which has aired on NPR, The Takeaway and WGBH's Innovation Hub. Having grown up in Burlington, Vt., he often spends time being in the woods hiking, camping, and skiing.