CSF Marks 30 Years of 529 Education Savings Plans, Highlighting Flexibility and New Opportunities

Celebrating 30 Years of 529 Education Savings Plans

The College Savings Foundation (CSF) is proudly commemorating the 30th anniversary of Congress' establishment of 529 education savings plans. These plans represent a fundamental shift in how families can save for educational expenses, providing flexibility and innovative gifting options to enhance savings for future learners.

A Legacy of Savings for All Generations

Over the past three decades, CSF has played an influential role in advocating for the expansion of 529 plans, collaborating with legislators to broaden their scope beyond just traditional four-year colleges. Today, 529 plans can fund a range of educational pathways, including community colleges, technical schools, professional certifications, and even postsecondary credential expenses.

This year, CSF’s annual Conference, themed "529s: Thirty Years of Stability in a Sea of Change," will convene experts including State Treasurers, financial institutions, and education advocates in Fort Myers, Florida, from March 3-5, 2026. This gathering aims to highlight both the accomplishments of the past and the ongoing efforts to adapt these plans to meet current and future educational needs.

Chris McGee, Chair of CSF, expressed pride in the organization’s ability to partner with various stakeholders to enhance 529 plans continuously, reflecting the evolving landscape of higher education. Recent surveys reveal a significant multigenerational trend: 25% of parents aged 20 to 50 reported using 529 funds for their education, now saving for their children’s future education as well. This trend exemplifies the legacy of saving initiated when 529s were first created.

529 Plans: A Valuable Resource for Higher Education

As of the third quarter of 2025, 529 plans boasted an impressive $561.9 billion in assets across more than 16.5 million accounts. The growing popularity of these plans is underscored by high school students' preferences for monetary gifts toward education rather than conventional material presents. According to CSF surveys, three-quarters of high school students would prefer monetary contributions for education during special occasions, signaling a proactive approach to funding their educational journeys.

With a staggering $1.8 trillion in student debt nationwide, high school students are increasingly aware of the need to secure financial support for their higher education endeavors. In fact, 80% of surveyed parents anticipate their children will need continuous education throughout their lives, signifying an evolving expectation for lifelong learning.

Emphasizing Lifelong Financial Planning

The expansion of 529 plans reflects the growing emphasis on continuous education. Funds can be used for an array of expenses, including room and board, supplies, and even student loan repayments, with up to $10,000 allocated for this purpose. Crucially, Congress enacted a pivotal change in 2024 allowing for unused 529 funds to be rolled over to a Roth IRA, acknowledging the importance of instilling saving habits from an early age. This innovative feature allows families to ensure their contributions serve dual purposes: funding education now and aiding retirement savings later.

Chris McGee notes, "While most families utilize their 529 savings for education, this allows parents to emphasize the long-term value of saving throughout their child's life. Discussing financial strategies around the kitchen table can empower children to express their dreams, while parents align on support for those aspirations."

The Historical Journey of 529 Plans

Since their introduction in 1996, Section 529 plans have undergone significant changes. Initially, earnings incurred taxes upon withdrawal, which was amended with the 2001 Economic Growth and Tax Relief Reconciliation Act, exempting qualified distributions from federal tax. By 2006, the Pension Protection Act made these tax-free statuses permanent.

Contributions to 529 accounts have surged, with CSF members noting over $750 million in gifting contributions in the first three quarters of 2025. The value of higher education on a person’s future is immeasurable, as illustrated by one contributor to the Edvest 529 College Savings Plan. Having contributed since her niece was eight, the donor expressed pride in supporting her education, enabling her niece to pursue a promising technical college path.

Employers are also recognizing the value of offering 529 plans as benefits to employees, showcasing their commitment to facilitating their staff’s future financial security. Liz Uzzo, Executive VP at H2M, remarked on NY’s 529 College Savings Program, praising its impact on employees' lives and its positive feedback.

Conclusion

As CSF reflects on 30 years of 529 education savings plans, it is evident that these tools play a crucial role in shaping educational opportunities for future generations. With ongoing innovations, adaptability, and a focus on lifelong learning, CSF remains committed to empowering families in their educational savings journey. For more information, visit collegesavingsfoundation.org.