Assets in College Savings Plans Skyrocket—Here’s How to Use Them

Why It Matters

The expanding scope and tax advantages of 529 plans could reshape how families fund education and other major life expenses, creating new opportunities for financial firms and influencing public policy.

Key Takeaways

• 529 contributions rose 8% to $46 billion in 2025
• Assets reached record $603 billion, driven by market gains
• Expanded qualified uses now include apprenticeships, student loans, vocational schools
• Unused 529 balances can transfer tax‑free to Roth IRAs within limits
• 60% of families still avoid 529s despite new flexibility

Summary

The video highlights the rapid expansion of 529 college‑savings plans, noting an 8% jump in contributions from $43 billion in 2024 to roughly $46 billion in 2025 and a record $603 billion in total assets last year.

Growth is fueled by both market appreciation and recent policy changes that broaden qualified expenses to include vocational schools, apprenticeship programs, and student‑loan repayments. Additionally, unused balances can now be rolled over tax‑free into Roth IRAs within set limits, offering greater flexibility for savers.

Despite these advantages, JP Morgan reports that 60% of families still do not use 529 plans. One father interviewed saved in a 529 from his daughters’ birth and recently helped the older child purchase a home, illustrating the account’s evolving utility. Two House bills this year propose extending 529 benefits to first‑time home purchases, though neither has passed.

If adoption rises, 529s could become a central tool for both education financing and broader wealth‑building strategies, prompting financial institutions to develop new products and policymakers to consider further tax‑policy refinements.

Original Description

WSJ’s Oyin Adedoyin explains how 529 savings plans can now be used for a wide array of aspirational goals in addition to paying for college tuition.

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