Need-to-know education changes in tax bill

The new tax bill will affect numerous areas of education funding and college planning. After numerous versions and last-minute changes, here is a summary of what did (and didn't) happen:

 

College tuition benefits - Originally targeted to be taxed, tuition benefits for grad students or children and spouses of employees remain tax-exempt.
 
529 plans - Now allow up to $10,000 per child per year to be used on K-12 tuition, a very positive change for families sending their kids to private K-12 schools. However, an expansion to allow 529 funds to be used on homeschool expenses did not pass.
 
ABLE account rollovers - People living with disabilities can save for living and education expenses in a tax-advantaged ABLE account. Prior to the new tax bill, parents who saved in a 529 plan and later learned their child had a disability had few options to avoid withdrawal penalties if that child didn't go to college. Now those 529 plans can be rolled into ABLE plans.
 
Home equity interest - No longer deductible in the new tax code. Taking out a home equity loan to help pay for college is a strategy some families have used that is now less desirable. However, your primary mortgage interest is still deductible.
 
Student loan interest - An earlier version of the tax bill eliminated the deduction of up to $2,500 of student loan interest, but the final version keeps it, good news for all those who have -- or plan to -- borrow for college.
 
Lifetime learning and Hope scholarship tax credits - Originally scheduled to be repealed, both tax credits remain unchanged in the new bill.
 
Expected Family Contribution (EFC) - One of the key components of the EFC calculation is the amount of federal tax paid. With so many changes to the tax code, many families' EFC's will change.

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