Dear Arkansan Vet,
First of all, let me say thank you for your service. The amendment to allow 529 College Savings Plan funds to be used for homeschool expenses was removed from the final bill. However, in it's current form, the bill does allow for up to $10K per year to be spent towards K-12 expenses, just not homeschool expenses.
Second, you asked a great question on "what can I do if he does not attend college?" You do have a few options.
1. You can change the beneficiary of the 529 account to another grandchild or even yourself. The IRS has a list of eligible qualified family members. You can even go up the family tree to your own child to help them pursue education. Maybe your child is changing careers or needs education to get a promotion at work.
2. If you don't have anyone to transfer the beneficiary but decide to take the cash out and not use it on qualified education expenses, you may owe income tax and a 10% penalty on the earnings. That's the difficult part. The 529 is a great option but you only get the tax benefit when it is used for education.
The plan description for the 529 College Savings Plan and the IRS website are both great resources for all of the rules and guidelines around qualified education expenses, allowances for withdrawals due to scholarship awards, transferring to different beneficiaries, and more. Please see your tax advisor for impacts based on your specific tax situation.
Have a Merry Christmas and a Happy New Year!!
