Four reasons a 529 plan might make sense for your family

     • 529 funds cover college, vocational programs, registered apprenticeships and can be used towards K-12 education.

     • In addition to tuition, 529 funds can pay for students’ day-to-day needs like internet, computers, qualified room and board, and certain K-12 tutoring costs.

A 529 education savings plan might sound like something only families with college-bound kids need. But the versatility of a 529 account may surprise you, whether your child heads to a four-year university, a trade school or elsewhere.

     1. What are the tax benefits of a 529 education savings plan? 

Earnings in a 529 plan grow free from federal taxes, and withdrawals used for qualified education expenses are also federally tax-free. While 529 contributions are not federally deductible, many states allow a deduction on your state return.

Despite their tax advantages, just 14% of adults include a 529 plan in their education savings strategy, according to a 2025 Edward Jones and Morning Consult study. Instead, most families rely on traditional personal savings accounts.

     2. Can a 529 be used if my child doesn’t attend a traditional college?

Beyond four-year colleges, you can use 529 funds for community colleges, graduate schools and vocational programs. Apprenticeships in fields like plumbing, electrical work and welding qualify too, provided they are registered with the U.S. Department of Labor.

If your child earns a scholarship, you can withdraw up to that amount from your 529 account without penalty, though earnings may still be taxable.

     3. What does a 529 plan cover beyond tuition?

Qualified costs for 529 plan withdrawals include books, supplies, computers, internet access and educational software. For students enrolled at least half time, room and board also qualify, including off-campus housing up to what the school sets as its cost of attendance. 

Recent changes in the law expanded 529 plan qualified expenses. Some new eligible expenses include certain testing fees, instructional materials, academic tutoring, and educational therapies for students with disabilities.

For K-12, you can use up to $20,000 from your 529 account per year for tuition, certain tutoring and curriculum materials. 

     4. What if I don’t use all the money in my 529 account?

If one child doesn’t need the 529 funds, you can transfer that account to a sibling, another qualifying family member or even yourself. You can also use 529 funds to pay up to $10,000 in student loans, roll them into a Roth IRA for the beneficiary up to $35,000 (subject to certain limits and criteria) or roll them into a disability savings account (ABLE account) for the beneficiary or a family member. 

With so many options for investing, withdrawals and redirecting the money, a 529 plan is one of the more flexible tools available for families thinking about education costs. A financial advisor can walk you through the details and help you choose a plan that fits your overall financial strategy. 

 This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.

Edward Jones, its employees and financial advisors cannot provide tax or legal advice. You should consult your attorney or qualified tax advisor regarding your situation.

Edward Jones, Member SIPC