529 Plan Statistics (2026)

US households held $594.5 billion in 529 college plans at the end of the first quarter of 2026, according to the Federal Reserve's Z.1 Financial Accounts.

That splits into $568.6 billion in college savings plans and $25.9 billion in prepaid tuition plans.

The total peaked at $602.9 billion at the end of 2025 and dipped slightly in the first quarter of 2026, which is a market movement rather than an outflow, since these balances are invested.

Total 529 assets have risen from $471.2 billion at the end of 2023 to $525.1 billion at the end of 2024 and $602.9 billion at the end of 2025.

That is roughly 26% growth over two years, driven by a combination of contributions and market returns that the Z.1 does not separate.

For scale, the same Z.1 table records $19.22 trillion held in IRAs, so 529 balances are about 3% of IRA balances.

Prepaid tuition plans went from $24.6 billion at the end of 2023 to $25.9 billion in the first quarter of 2026, growth of about 5%.

College savings plans went from $446.6 billion to $568.6 billion over the same period, growth of about 27%.

Prepaid plans lock in future tuition at today's prices at participating institutions, which is a narrower and less portable promise than a savings account that can follow the student anywhere.

Qualified higher education expenses cover enrolment and attendance at any college, university, vocational school or other postsecondary institution eligible for federal student aid.

K-12 expenses now qualify up to $20,000 per year per beneficiary, and the definition is broad: tuition, curriculum and curricular materials, books, tutoring outside the home, standardised test and AP exam fees, college admissions exam fees, dual enrolment fees, and educational therapies from a licensed practitioner.

Registered apprenticeship fees, books, supplies and equipment qualify, as do certain postsecondary credentialing expenses.

The K-12 allowance was $10,000 per year before 31 December 2025 and is $20,000 per year after it.

The limit is per beneficiary across all of that beneficiary's 529 plans, not per plan, so opening a second account does not double it.

This is the figure most likely to be wrong in older material, since anything written before 2026 will state $10,000 and read as authoritative.

Up to $10,000 lifetime per individual can be withdrawn to pay principal or interest on the beneficiary's student loans, or those of a sibling.

The limit is per individual rather than per account, so a family with two children has $10,000 available for each.

Interest paid with 529 money does not qualify for the student loan interest deduction, which is the tradeoff: the withdrawal is tax-free, and the interest it pays stops being separately deductible.

For distributions after 31 December 2023, a beneficiary can roll unused 529 money into their own Roth IRA.

The conditions are strict and all must hold: a direct trustee-to-trustee transfer, within the Roth annual contribution limit, capped at $35,000 lifetime, from an account open at least 15 years, and not exceeding contributions plus earnings from before the five-year period ending on the distribution date.

The practical effect is that the old objection to overfunding a 529, that leftover money gets taxed and penalised, now has a partial answer worth up to $35,000.

The account must have been open for 15 years at the point of the rollover, which makes the opening date a decision with consequences 15 years later.

That is an argument for opening an account early with a small balance, since the clock starts when the account does rather than when it is funded.

It also means the rollover is not available to anyone who opens a 529 for a teenager, which is exactly the group most likely to end up with leftover money.

Contributions are not deductible on a federal return. The benefit is that earnings accumulate tax free and qualified distributions are not taxable.

Contributions cannot exceed the amount necessary to provide for the beneficiary's qualified higher education expenses, and each programme sets its own contribution limit, which the plan trustee or administrator can state.

Many states offer a state income tax deduction or credit for contributions, which is a state matter rather than a federal one and is the main reason plan choice is not purely about fees.

If a distribution is larger than the beneficiary's qualified higher education expenses, a portion of the earnings is taxable.

Only the earnings portion is affected. The contributions were made with after-tax money and come back out untaxed regardless.

The programme reports the split on Form 1099-Q: gross distribution in box 1, earnings in box 2 and basis in box 3, which is the form to reconcile against before filing.

The general ordering most planners use is retirement first, because there are loans for college and none for retirement, and because a 529 counts as an asset in financial aid calculations while a retirement account largely does not.

The 529 earns its place once retirement saving is on track, particularly where a state deduction is available and the time horizon is long enough for tax-free compounding to matter.

The Roth rollover has softened the overfunding risk without eliminating it, since $35,000 is a cap rather than a full unwind.

All balances are from the Federal Reserve Z.1 Financial Accounts of the United States, table B.101, memo lines 42, 43 and 44, which report assets held in 529 college plans split into college savings and prepaid tuition.

All rules and limits are quoted from IRS Topic no. 313, Qualified tuition programs, last reviewed 6 February 2026.

This is educational rather than tax advice, and anything with a tax consequence is worth confirming with a tax professional.