Making the Most of College Savings: Where 529 Plans Stand Today
September is National College Savings Month—a yearly nudge to put education on the budget, not just the wish list. It’s a practical moment for parents and grandparents to set money aside for future schooling, so students can move toward their goals without taking on more debt than they have to.
529 Plans on the Rise
A new survey from the College Savings Foundation points to a clear shift: more families are choosing 529 plans as their go-to way to save. The trend is meaningful—more than half of parents nationwide now use these plans to prepare for college costs. The Education Plan®, a 529 education savings program, is one flexible option built to cover a range of qualified education expenses.
What the Latest Survey Shows
The survey captures how families are thinking differently about paying for education—saving earlier, saving more, and using tools designed for that job.
- Surge in 529 Plan Utilization: Across the country, 94% of parents report they’re actively funding their children’s higher education in some way. Nearly half (48%) now list savings as their primary strategy for college planning—up from 28% last year. And among those dedicated savers, more than half rely on 529 plans as the main tool.
- Broadening Educational Horizons: 529 plans aren’t just for four-year universities. Families can use them for career training, community colleges, and even K-12 tuition. They also allow up to $10,000 to be used for student loan repayments, which gives families another way to manage costs.
- Supporting Lifelong Learning: Education doesn’t stop at graduation. A notable 43% of parents who are saving for their own schooling are also using 529 plans—signaling that upskilling and retraining are part of the picture, too.
- Commitment to Savings: Parents are stepping up their contributions. Seventy-one percent are saving over $5,000 per child; 55% are saving more than $10,000; and 36% have passed the $25,000 mark. That resolve points to long-term planning, not just good intentions.
Planning With Intention
Natalie Cordova, Executive Director of the New Mexico Education Trust Board, welcomes the stronger national commitment to education savings. During College Savings Month, she encourages families to look into the benefits of investing with The Education Plan®, noting its flexibility for different learning paths and timelines.
Why the Tax Treatment Matters
Tax advantages are a core part of why 529 plans work. Contributions can grow tax-free, and withdrawals used for qualified education expenses are tax-free as well. That means more of your money can stay invested toward education rather than going to taxes. On top of that, several states—New Mexico among them—offer tax deductions or credits on contributions, making it even more attractive to invest for a student’s future.
Looking Ahead
As education takes many forms—four-year degrees, two-year programs, career training—529 plans have become a practical, adaptable way to pay for it. The steady rise in their use suggests families are planning ahead with clearer intent, and that’s the kind of preparation students can feel for years to come.
Frequently Asked Questions
Why does National College Savings Month matter?
It’s a timely reminder to review your plan, set goals, and put money aside for education. The focus in September helps families prioritize savings so students can pursue school with less reliance on debt.
What is a 529 plan, in simple terms?
It’s a tax-advantaged savings plan built for education costs. You put money in, it can grow tax-free, and when you use it for qualified expenses, withdrawals are tax-free too.
What can 529 funds pay for?
They can cover qualified costs at four-year schools, community colleges, and career training programs, as well as K–12 tuition. A 529 can also be used for up to $10,000 in student loan repayments.
How do the tax benefits help me?
Earnings in a 529 aren’t taxed as they grow, and qualified withdrawals aren’t taxed either. In addition, several states—New Mexico included—offer tax deductions or credits on contributions.
How widely are families using 529 plans right now?
Survey results show strong momentum: 94% of parents are actively funding higher education, 48% now make savings their primary strategy (up from 28% last year), and more than half use 529 plans as their main tool. Many are saving substantial amounts, with 71% setting aside over $5,000 per child, 55% more than $10,000, and 36% surpassing $25,000.
