A recent survey conducted by Edward Jones in partnership with Morning Consult reveals that 52% of U.S. adults remain unfamiliar with 529 plans, one of the most widely used tax-advantaged education savings vehicles. Only 14% of respondents indicated they currently use or plan to use a 529 plan to save for education expenses, underscoring a significant awareness gap among American families.
The findings come as many households grapple with balancing education savings against other financial priorities. Just 38% of survey participants said they feel they are saving enough to meet future education costs, a slight decline from 40% in the prior year. Among Generation X respondents, confidence was notably lower, with only 28% believing they are on track.
Rising costs are reshaping attitudes toward higher education. The survey found that 41% of Gen Z adults and 29% of millennials said inflation and higher borrowing costs make them more likely to forgo college in favor of full-time work or internships. This trend aligns with broader concerns about affordability and student debt.
Despite the low awareness, 57% of respondents said the tax benefits associated with 529 plans make them more inclined to open an account. However, many remain unaware of the range of qualified expenses these accounts can cover. Nearly three-quarters (72%) did not know 529 funds can be used for qualified apprenticeship programs, while 65% were unaware they can also cover certain K-12 education expenses.
Andy Esser, a financial advisor and parent of four at Edward Jones, emphasized the flexibility of modern 529 plans. “It’s important for Americans to understand how flexible 529 plans have become,” he said. “But what's even more important is engaging with a financial professional who's dedicated to educating you on your options.”
The survey also highlighted a shift in gift-giving preferences: one in five respondents said they would rather receive contributions to a 529 plan for their child than traditional gifts from relatives and friends. This suggests a growing recognition of the long-term value of education savings.
Despite these potential benefits, most Americans are navigating education savings without professional guidance. Edward Jones found that 78% of respondents do not typically consult a financial advisor on these matters. However, 21% said working with an advisor would help them feel more confident about covering future education expenses. This mirrors trends seen in other areas of financial planning, such as retirement, where advisors play a key role in boosting confidence. For example, a Northwestern Mutual index found that advisors significantly improve Americans' personal prosperity scores.
The findings point to an opportunity for financial advisors to educate clients on the benefits of 529 plans, especially as education costs continue to rise. With the right guidance, families may be able to leverage these accounts more effectively, potentially easing the burden of saving for college and other educational pursuits.
