More than half of Americans remain unfamiliar with one of the most widely used education savings tools, according to new research from Edward Jones.
The firm’s latest survey, conducted with Morning Consult, found that 52% of US adults do not know what a 529 plan is. Just 14% said they either use or intend to use one as part of their strategy to save for education.
The findings point to a significant knowledge gap around tax-advantaged savings accounts that can be used to cover qualified education expenses, including college tuition, K-12 costs and some apprenticeship programs.
“As a financial advisor and parent of four, I've seen first-hand the benefits that 529 plans have for education savings,” said Andy Esser. “It’s important for Americans to understand how flexible 529 plans have become. But what's even more important is engaging with a financial professional who's dedicated to educating you on your options, sorting through the most appropriate options and providing clear direction on what actions to take.”
The survey also underscored the pressure many families face when trying to balance education savings with other financial priorities.
Only 38% of respondents said they feel they are saving enough to meet future education costs, down slightly from 40% a year earlier. Among Generation X respondents, confidence was even lower, with just 28% saying they believe they are on track.
Rising costs are also influencing attitudes toward higher education. The study found that 41% of Gen Z adults and 29% of millennials said inflation and higher borrowing costs make them more likely to skip college and pursue full-time work or internships instead.
At the same time, 57% of respondents said the tax benefits associated with 529 plans make them more inclined to open an account.
The survey found that many Americans are still unaware of the range of expenses 529 funds can cover. Nearly three-quarters (72%) did not know the accounts can be used for qualified apprenticeship programs, while 65% were unaware they may also be used for certain K-12 education expenses.
Education savings is also becoming a gift preference for some families. One in five respondents said they would rather receive contributions to a 529 plan for their child than traditional gifts from relatives and friends.
Despite the potential benefits, most Americans are making education savings decisions without professional guidance. Edward Jones found that 78% do not typically consult a financial advisor on these matters, though 21% said working with an advisor would help them feel more confident about covering future education expenses.
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