Exploring the Path of Apprenticeships through an Edvest 529 College Savings Plan

published November 1, 2024

Saving for a child’s education is often a daunting task for many families, especially with the increasing cost of tuition. However, early planning and leveraging savings tools, such as a 529 college savings plan, can significantly ease the financial burden. Kim Sebastian and her family’s experience with Wisconsin’s Edvest 529 College Savings Plan demonstrates how early savings efforts can pay off, not only for traditional education but also for alternative pathways like apprenticeships. Meanwhile, her son Cole’s journey through an electrical apprenticeship offers a glimpse into the world of trade programs as a fulfilling alternative to a conventional college education. Together, their stories provide insight into both the benefits of 529 college savings plans and the opportunities that come with trade apprenticeships.

The Motivation Behind Early Saving

Kim’s journey into education savings began right after the birth of her second son. While in the hospital, she received a packet of information that introduced her to the Edvest 529 program. “They handed us a big packet of information, and one of the things included was signing up for Edvest 529. They even offered to seed our account with $75,” Kim recalls. This small incentive became a big motivator for the family to start saving for their children's education.

After learning about the program, Kim and her family not only opened an account for their second son, but also transferred the savings they had set aside for their eldest son, Cole, into an Edvest 529 account. When their third child was born, they quickly opened another account, ensuring all their children would have a financial head start for their educational journeys.

Cole’s Path: From College to Apprenticeship

Initially, like many parents, Kim believed her children would follow a traditional college path. Cole, their eldest, started out at a four-year university but soon realized that the conventional college experience wasn’t the right fit for him. After exploring different options, he discovered a passion for electrical work and made the decision to pursue an apprenticeship instead.

"We looked into how we could use our Edvest 529 funds to support his apprenticeship," Kim says. Though initially focused on funding a college education, the flexibility of the 529 plan allowed the family to reallocate savings to support Cole’s new path. His apprenticeship led him to Waukesha County Technical College (WCTC), where he enrolled in the Associated Builders and Contractors (ABC Wisconsin) Electrical Apprenticeship program.

Cole’s decision to enter the electrical trade was shaped by family influence and a deepening interest in problem-solving, particularly around physics and electricity. A friend of the family, who worked in the field, encouraged him to explore electrical work, which aligned perfectly with Cole’s hands-on learning style.

"I've always enjoyed working with my hands and figuring out how things work," Cole explains. The apprenticeship model, combining practical experience with theoretical knowledge, suited him far better than traditional college. This experience reflects a growing trend among students who, like Cole, are discovering the value of trade education.

Financial Support from the Edvest 529 Plan

One of the keys to Cole's successful transition into the electrical field was the financial support provided by his parents to the Edvest 529 college savings plan. The family was able to use their savings to cover the costs of tuition for his apprenticeship classes, as well as specialized courses in safety and first aid, such as OSHA certifications.

Cole notes, "Knowing that my family had saved for my education gave me a sense of security. I had the freedom to choose the career path that was right for me." This financial backing allowed Cole to focus on his apprenticeship without worrying about educational expenses, highlighting the flexibility of the Edvest 529 savings plan beyond traditional college tuition.

Advice for Parents and Future Apprentices

For parents, Kim offers clear advice: start saving as early as possible. "Even small contributions can grow over time," she says, emphasizing the long-term benefits of compounded growth in a 529 plan. She also highlights the versatility of the Edvest 529 account, which can be used not just for tuition but also for other qualifying educational expenses, including books, technology, and even certain apprenticeship-related costs, such as required tools and equipment.

Cole's advice to students is equally direct: "Explore your options early. I wish I had known more about the trades when I was in high school." He advocates for greater awareness of apprenticeship programs, which offer hands-on learning experiences and can lead to lucrative and fulfilling careers. In Wisconsin, Registered Apprenticeship programs are managed by The Department of Workforce Development, can be found at https://dwd.wisconsin.gov/apprenticeship/.

Cole's Career at Current Electric

Cole is now employed at Current Electric in Wauwatosa, where he works alongside other apprentices and young electricians. He describes the work environment as supportive and collaborative, with peers at various stages of their training.

"It's encouraging to be part of a community where we’re all learning together," Cole says. He values the balance between classroom instruction and hands-on learning, noting that most of the essential skills are acquired on the job. "The classroom gives you the theoretical background, but the real learning happens on-site," he adds.

Having completed his apprenticeship in 2023, Cole is now preparing to take the journeyman’s exam, which will further solidify his position as a licensed electrician. He believes that the financial planning provided by his family’s Edvest 529 college savings plan, combined with the hands-on experience gained through his apprenticeship, has put him on a path to continued success in the electrical trade.

The Sebastian family’s experience illustrates the far-reaching benefits of early financial planning through an Edvest 529 college savings plan. Cole’s journey from a four-year university to a successful apprenticeship demonstrates the flexibility of these plans and the opportunities they offer beyond traditional education. With tools like the Edvest 529 College Savings Plan, families can support their children’s ambitions, whether they choose a conventional college education or a rewarding career in the skilled trades. Cole’s story highlights the importance of exploring all available pathways and leveraging financial resources to ensure success in any educational or career endeavor.

For more information on how to use an Edvest 529 account to plan and pay for apprenticeships, check out this helpful video from our Financial Consultant, Khaleel:

To learn more about Wisconsin’s Edvest 529 College Savings Plan, visit the Wisconsin 529 College Savings Program webpage, or email CollegeSavingsProgram@dfi.wisconsin.gov.

About Cheryl:

Cheryl Rapp has over 24 years of experience working for the State of Wisconsin. In her current role as College Savings Program Finance Officer for the Wisconsin Edvest 529 College Savings Program, Cheryl manages outreach to Wisconsin residents and works to increase awareness of the plans among Wisconsin residents while helping them begin saving for their children’s higher education. She is a graduate of the University of Wisconsin-Green Bay, from which she earned a bachelor's degree in humanistic studies.

Prior to joining the College Savings Program, she served as the state’s College Affordability Specialist. Her experience includes educating students, parents, teachers, and school counselors on the value of saving for post-secondary education and how to complete the Free Application for Federal Student Aid (FAFSA).

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To learn more about Wisconsin's Edvest 529 College Savings Plan, its investment objectives, risks, charges and expenses see the Plan Description at Edvest.com before investing. Read it carefully. Investments in the plan are neither insured nor guaranteed and there is the risk of investment loss. Wisconsin taxpayers can qualify for a 2024 state tax deduction up to $5,000 annually per beneficiary, for single filer or married couple filing a joint return, from contributions made into an Edvest 529 College Savings Plan. Married couples filing separately may each claim a maximum of $2,500. Prior to investing, check with your home state to learn if it offers tax or other benefits such as financial aid, scholarship funds or protection from creditors for investing in its own 529 plan. If the funds aren't used for qualified higher education expenses, a federal 10% penalty tax on earnings (as well as federal and state income taxes) may apply. Consult your legal or tax professional for tax advice. TIAA-CREF Individual & Institutional Services, LLC, Member FINRA, distributor and underwriter for the Edvest 529 College Savings Plan.

Withdrawals for registered apprenticeship programs can be withdrawn free from federal and Wisconsin income tax. If you are not a Wisconsin taxpayer, these withdrawals may include recapture of tax deduction, state income tax as well as penalties. You should talk to a qualified professional about how tax provisions affect your circumstances.

This testimonial was provided by Edvest 529 College Savings Plan account owner(s), and no direct or indirect compensation was given in return. No material conflicts of interest exist on the part of the account owner(s) giving the testimonial, resulting from their relationship with TIAA-CREF Tuition Financing, Inc. Results experienced by the account owner(s) may not be representative of the experience of another/other account owner(s), and there is no guarantee of future performance or success.

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