Congress expands 529 tax break to cover college application fees
H.R. 7205 — Application FEES Act · Filed by Janelle Bynum (D-OR) · Introduced Jan 22, 2026 · Referred to committee
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What it does
This bill allows families to use 529 college savings plans to pay for application fees when applying to higher education institutions. Currently, 529 plans can only be used for tuition, room and board, and certain other education expenses; this bill adds application fees to that list, letting families withdraw money tax-free from these accounts to cover the cost of submitting college applications.
Why we flagged it
The bill straightforwardly expands the list of eligible expenses under IRC 529 to include application fees. It is a narrow, technical amendment to the tax code with no hidden mechanism or rider.
What the text implies
- Application fees are typically $50–$100 per institution; the tax benefit is modest for most families but may be more meaningful for families applying to many schools or in high-income brackets.
- The change may slightly increase the perceived value of 529 plans relative to other savings vehicles, potentially affecting demand for these accounts and the financial institutions that administer them.
The full analysis lists 3 implications of this text.
Who stands to gain
families with 529 plans; 529 plan administrators and financial institutions