# Half of Parents Now Use 529 Plans But 71% Still Expect to Borrow for College 529 savings plans gain traction while student debt concerns persist among families. - **Source:** [The College Investor](https://brifing.si/source/d431d77d-492e-4105-be7c-2525bbb643ab) - **Published:** 2026-08-11 - **Topic:** [Finance](https://brifing.si/c/finance) - **Original article:** - **On Brifing:** https://brifing.si/s/0d419bfe-939a-48fb-9e42-1b3bd4fa3117 ## Parents' Education Savings Habits A College Savings Foundation survey of 1,000 parents reveals 93% plan to financially support their children's education, with 84% considering higher education a worthwhile investment. Half utilize 529 savings plans, while 85% believe continuous skill development will be necessary. Career and technical schools are valued equally with traditional four-year colleges, reflecting shifting perceptions about education pathways. ## Intergenerational Impact of 529 Plans 41% of parents using 529 plans report these funds assisted their own education, with 77% citing this as motivation to save for their children. 46% would consider using 529 funds for their own continuing education. While 73% have saved over $5,000 per child, these amounts remain below recommended targets for college savings, indicating room for improved financial planning. ## Savings Mechanisms and Preferences Among 529 users, 92% make automatic contributions (64% monthly, 28% quarterly). Plan selection drivers include ease of use (52%), federal tax benefits (34%), and gifting flexibility (11%). Awareness gaps persist: only 65% know 529s cover non-traditional education, 61% recognize the $20,000 annual K-12 withdrawal option, and just 49% understand the Roth IRA rollover provision for unused funds. ## Student Loan Reality Check 71% of parents anticipate needing loans for education costs—46% through education loans, 21% via credit cards or cash advances, and 11% by borrowing against retirement accounts. With national student debt exceeding $1.8 trillion, these alternative financing methods raise concerns as credit cards and retirement withdrawals rank low on recommended funding strategies. ## Industry Data and Market Size ISS Market Intelligence reports 529 plans held $627 billion across 17.3 million accounts by Q2 2026, reaching record balances after Roth transfer rules took effect. Congressional expansions continue broadening eligible expenses—last year adding trade schools and certifications, while 2026 changes doubled K-12 withdrawal limits to $20,000, demonstrating legislative efforts to enhance plan flexibility. ## Policy Guidance and Family Adaptation Survey data indicates families are responding to policy changes. CSF advocates for more families making small, regular contributions to reduce borrowing needs. However, awareness remains a barrier—nearly half of parents don't know about Roth rollovers or student loan repayment options. The Class of 2026 is projected to borrow $43,500 on average, sustaining the savings-debt tension. ## Alternative Education Funding Methods Beyond 529s, 58% of parents know about the $10,000 student loan payment provision, but only 49% understand unused funds can transfer tax-free to Roth IRAs. This knowledge gap may hinder long-term financial planning, particularly for lower-income families who could benefit most from early savings mechanisms and tax-advantaged accounts. ## Future of Education Savings While 529 plan adoption grows, rising education costs continue outpacing savings. Half of parents using these plans marks progress, but persistent borrowing expectations signal systemic challenges. Policymakers and financial institutions must prioritize education about early savings strategies to close this gap. The current financing shortfall may have lasting economic consequences if unaddressed. ## Sources covering this story - https://thecollegeinvestor.com/85806/50-of-parents-now-use-529-plans-but-71-still-expect-to-borrow-for-college/ — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._