- 529 plan accounts grew practically 8% in Q2 2025, reaching 17.3 million accounts and $568 billion in belongings.
- Development got here earlier than the One Huge Stunning Invoice Act (OBBBA) expanded certified bills to cowl workforce coaching, licensing exams, and extra.
- Internet inflows into 529 financial savings plans reached $4 billion in Q2, the very best second-quarter stage in at the very least three years.
Within the three months ending June 30, 2025, 529 faculty financial savings and pay as you go plans noticed one among their strongest intervals of progress in years. The most recent information from ISS Market Intelligence exhibits 17.3 million accounts holding $568 billion in belongings, up from 16.8 million accounts and $508 billion a 12 months earlier. That’s a 7.9% improve in accounts and an 11.8% soar in complete belongings over the identical interval.
What makes this surge noteworthy is that it occurred earlier than the full influence of the One Huge Stunning Invoice Act (OBBBA). The brand new regulation, signed in July 2025, considerably broadens what households pays for with 529 funds. Whereas traditionally targeted on greater schooling, 529 plans will quickly be capable of cowl sure workforce coaching packages, licensing examination charges, {and professional} credentialing prices. The regulation additionally elevated what’s allowed for elementary schooling as nicely.
This enlargement has the potential to speed up account openings and contributions within the second half of the 12 months and past, significantly amongst households who see 529s as a tax-advantaged technique to put money into each conventional schooling and career-focused coaching.
Inflows To 529 Plans Close to Document
Internet inflows (contributions minus withdrawals) into 529 financial savings plans totaled $4 billion in Q2 2025, up from $3.6 billion throughout the identical quarter final 12 months and $3.8 billion in 2023. The rise displays each greater contributions and regular withdrawals by households utilizing funds for certified bills.
The resilience of cash flowing into 529 plans is notable, particularly given the volatility in monetary markets in 2024 and early 2025. Households look like sustaining their dedication to long-term schooling financial savings, even amid shifting rates of interest and market efficiency.
Trade analysts say a part of this energy comes from a rising consciousness of 529 plan flexibility. In recent times, lawmakers have added new certified bills, corresponding to Okay–12 tuition, apprenticeships, and restricted rollovers to Roth IRAs. The OBBBA’s workforce coaching provisions are the newest on this collection of modifications.
How OBBBA Expands Certified Bills
Beginning with withdrawals made after July 4, 2025, 529 funds can be utilized to pay for vocational and technical coaching packages, licensing examination preparation, and persevering with schooling required to keep up skilled credentials. Examples embrace CDL coaching, HVAC certification, CPA examination charges, bar examination preparation, and persevering with schooling for academics, nurses, or monetary advisors.
Moreover, 529 plan withdrawals for Okay-12 schooling can now embrace greater than tuition! This contains course supplies, tutoring, and extra. And beginning in 2026, the restrict for Okay-12 bills rises to $20,000 per 12 months.
It is essential to notice that state tax remedy might not align with these new federal guidelines. States like California and Colorado have traditionally declined to comply with sure federal 529 expansions, which means residents may face state tax on some withdrawals even when they’re penalty-free on the federal stage.
529 Plans Will Possible Proceed To Develop
By including workforce coaching to the record of certified bills, policymakers are opening the door to extra households to make use of 529 accounts. This contains grownup learners altering careers, professionals in search of superior credentials, and college students who plan to attend commerce faculties fairly than four-year universities.
Even current professionals like monetary advisors and CPAs can use the plan to pay for his or her persevering with schooling necessities (and perhaps get a tax deduction for doing so).
It additionally creates new planning alternatives for households. Dad and mom may begin funding a 529 account understanding it’d in the future pay for his or her little one’s faculty diploma, a vocational certification, or perhaps a future profession change in maturity.
From an business perspective, the newest quarterly information reinforces a multi-year development: 529 financial savings plans are attracting extra households, rising in each account numbers and complete belongings. As of Q2 2025, financial savings plans account for $543 billion of the overall $568 billion in belongings, with pay as you go plans holding the remaining $25 billion.
The coverage shifts from OBBBA may encourage states and plans to market 529s to new demographics, together with employers who might need to use them as a part of office advantages packages.
With broader eligible bills and potential for retirement account rollovers, the enchantment of 529s is increasing nicely past mother and father of college-bound kids.
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