Over half of Americans still blind to 529 plan benefits, survey finds

More than half of Americans say they don’t know what 529 plans are, according to a new study by Edward Jones and Morning Consult, highlighting persistent gaps in public knowledge around education-specific investment tools – even as related assets and advisor interest grow.

The survey found that 52 percent of adults remain unfamiliar with 529 plans, the tax-advantaged accounts designed to support education-related expenses. Against that backdrop, only 14 percent of respondents said they currently use or intend to use such a plan to save for education.

According to the new poll findings, just 38 percent of adults believe they are saving enough to meet their future education goals, down from 40 percent in a similar study last year. Among Gen X respondents, that confidence was even lower, with just 28 percent reporting they’re on track.

The data come as younger Americans reevaluate the value of traditional higher education. Edward Jones's new study noted 41 percent of Gen Z and 29 percent of Millennials are more likely to opt out of college altogether due to financial concerns.

Because 529 plans offer notable tax benefits, including tax-free earnings growth and federally tax-free withdrawals for qualified expenses, 57 percent of respondents said they're inclined to enroll in one.

Still, the specifics of how those funds can be used remain unclear to many. The latest research found 72 percent of Americans don’t know that 529 funds can be applied to apprenticeships, and 65 percent are unaware the plans can cover K–12 tuition.

Last year’s survey by Edward Jones and Morning Consult showed similar gaps, with only one-fourth of adults understanding that 529 plans extend beyond higher education. Even among 529 users, awareness was fragmented as less than half understood that funds could be used for trade schools, student loans, or rolled into a Roth IRA.

In terms of usage, 20 percent of respondents said they would prefer education savings contributions over traditional gifts for their children. But for families with multiple children, approaches vary: 42 percent use a separate 529 account per child, while 32 percent consolidate into a single account, and 18 percent remain undecided.

The majority of Americans aren’t seeking professional guidance, with 78 percent not consulting a financial advisor before making education savings decisions. However, 21 percent said that working with an advisor would make them feel more confident about affording future education expenses.

Despite low consumer awareness, broad adoption and financial advisor engagement are on the rise. An ISS Market Intelligence report last year showed a 19 percent year-over-year increase in 529 account sales during the second quarter of 2024, with total assets growing by 13.3 percent to $483.7 billion. The same report found 95 percent of advisors plan to maintain or increase 529 use, viewing the plans as viable multigenerational planning tools.