From Ivy League to 'state U': Are investors rethinking 529 strategies amid political pressure?

Despite President Donald Trump freezing $2.2 billion in federal funding and threatening to revoke the institute’s tax-exempt status, financial advisors say the political storm has done little to change their long-term planning advice, nor has it shaken their clients’ commitment to saving for higher education. 

The funding freeze follows Harvard’s refusal to comply with a set of federal demands that included the renowned education institution ban face masks and close its diversity, equity and inclusion programs. The White House also demanded that Harvard cooperate with federal immigration authorities and reform its admissions process for international students to screen for students “supportive of terrorism and anti-Semitism."

Harvard is the first major Ivy League university to openly defy the current administration’s demands. Earlier this week, the university announced plans to borrow $750 million from Wall Street to offset anticipated financial strain. Yet despite the high-stakes standoff, financial advisors say families are staying focused on the bigger picture. 

“There’s always something going on in the political scene, but it’s not a one-to-one ratio when it comes to getting children educated,” said Pamela Rigsby, founder and partner at Pursuit Wealth Strategies. “It may not be Harvard, Yale, Columbia. It may be the University of North Carolina or North Carolina State, where we know there’s really not a political issue at the moment.” 

Rigsby emphasized that college planning remains, at its core, a numbers-driven exercise—one that requires families to set aside emotion and focus on the long view. “We just need to make sure that that parent, or that set of parents, are properly ready to send that kid to school so that they can be educated,” she says. “It’s more about staying out of the political realm and just looking at the facts.” 

Melissa Bouchillon, managing partner at Sound View Wealth Advisors, took a similarly cautious tone. “Right now, we’re still advising that 529 plans are a good planning tool,” she said, referring to tax-advantaged investment vehicles used to save for education. “But as rules change, as policies change, we’ve got to reflect that in the strategies we’re using for clients.” 

Bouchillon noted that in times of uncertainty, families should double down on what they can control. “When the world feels uncontrollable and there’s so much out there that gets people nervous, I say take a step back,” she says. “Whether it’s a 529 plan, a custodial account, or a general investment fund, the key is that we’re saving for a child’s future.” 

Neither advisor dismissed the possibility that proposed policy shifts could eventually affect the structure of college savings, but both stressed that families should not let short-term political threats dictate long-term financial decisions. “We don’t know if that child is going to college, starting a business, or attending trade school,” Bouchillon stresses. “But we do know they’ll need a leg up. And having savings in place to support that future—whatever it may be—is what matters most.”