Edward Jones: Financial advisors must step up to educate clients on 529 plans

A 529 plan, with its tax benefits, can be a great way to save for a college education. How aware, though, is the average American about the 529 plan and its advantages?

According to research from Edward Jones and Morning Consult, many Americans are largely unaware of the options available to maximize their education savings, with 52% saying they don’t know what 529 plans are. Given this widespread unfamiliarity, the study said that many Americans are not using the tool, with only 14% noting they have or plan to use a 529 plan as part of their education savings strategy.

A 529 plan is an education savings investment account that provides tax benefits when used toward qualified education expenses for the account beneficiary. The survey pointed out that 529 plans offer a wide range of benefits, including the following:

• Tax advantages: Earnings within a 529 plan grow tax-deferred, meaning you don't pay taxes on the investment gains until you withdraw them. This was an attractive factor for respondents, with 57% noting that the tax benefits make them more inclined to enroll in a 529 plan.
• Flexibility. In addition to the tax advantages, 529 plans offer a variety of options for how account holders manage the accounts or how beneficiaries use the funds. Additionally, 529 plans accept contributions from anyone, regardless of whether they are account holders, making it easy for loved ones to contribute.
• Can be used for more than college: Many don’t realize that 529 plans may qualify to be used beyond tuition for college or university. Most respondents are not aware that 529 funds could be used for qualified apprenticeships (72%) or K-12 expenses (65%), among other options.
• Gifting contributions for beneficiaries: One in five respondents (20%) would prefer their child to receive contributions to a 529 plan or education savings as a gift from loved ones.
• Planning thoughtfully for multiple children: If families have multiple children, there are different approaches to consider: whether one 529 account will suffice for all children, or if individual accounts make sense. Of the respondents who have more than one child and are enrolled in a 529 plan, 42% said that they have a separate account for each child and 32% said they have one account for all their children. And 18% said they’re still figuring out how they plan to manage, the survey said.

Why the lack of awareness of 529s?

So, with all these benefits, why do so many consumers not know about 529 plans? “It’s clear there’s a lack of education around 529 plans, and this has a real impact on how people plan to save for education,” said Julia Bartak, financial advisor with Edward Jones. “That’s why we do this survey every year – to see how people are feeling about their education savings and discovering where we can help bridge the knowledge gap.”

And what can financial advisors do to help make 529 plans more popular? Financial advisors are in a unique position to educate people about 529 plans and help close the awareness gap, said Bartak. “I always joke that we need to educate people about education plans, but it’s true! This could mean sitting down with your clients and asking them if they have any education savings goals and what those might be. From there, you can factor in what tools would work best for them, based on what they’re hoping to achieve and their overall financial picture. As financial advisors, we have a responsibility to help better inform people about 529 plans, and Edward Jones’ recent findings make me even more passionate about spreading the word.”

Helping families meet education-savings goals

Financial advisors can take several steps to act as impartial third parties to develop strategies that help meet families’ education savings goals, especially within the context of their broader financial goals. “Understanding clients’ goals is the most important piece of the puzzle here,” said Bartak. “Spending time discussing this foundational piece will help you develop tailored strategies that align with your clients’ education savings goals and work within their broader financial goals.”

“Once you have that clear picture, the possibilities are endless – but it’s crucial that your guidance is tailored to match their financial priorities and goals,” added Bartak. “You likely already know the many use cases for 529 funds, such as vocational or trade school, room and board and even the repayment of student loans, so you have the opportunity to highlight how these options can support your clients’ goals.”

Bartak added that finances can be deeply emotional. “From my role as a financial advisor, I’m able to keep a level head and think of the larger picture on behalf of my clients, who might have competing emotions. Having an impartial, third-party professional can be incredibly reassuring for so many people,” she said.

How graduates value college education

This survey by Edward Jones is coming at a time when, according to a new report by the TIAA Institute, the value of a college or a graduate degree has never been higher. The report found that higher education continues to offer long-term financial value for students and graduates, including greater economic mobility and improved retirement outcomes. Additionally, college graduates consistently earn more money over their lifetimes. And data gathered by the Bureau of Labor found college graduates earn approximately 80% more than those with only a high school diploma.

Looking ahead, a degree will remain essential, the TIAA Institute survey said. By 2031, more than half of all U.S. jobs are projected to require a college degree, while just 6% will be open to individuals without a high school diploma.
The Edward Jones survey was conducted by Morning Consult among a national sample of 2,201 adults ages 18+ from April 8-10, 2025.

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