Many Parents Are Rethinking College Savings Plans Amid Changing Priorities

Before starting their family, Asha Bailey and her husband began exploring the best ways to secure their future children’s financial well-being. In their San Diego community, 529 college savings plans were frequently recommended.

Curious to learn more, the couple visited their credit union to consider opening a 529 account. However, upon discovering the funds could only be used for educational expenses, which their children might not pursue, they felt uncertain about committing.

“I want to encourage my kids to pursue higher education if that’s what they choose, but I don’t know what path they’ll take,” said Ms. Bailey, 29, a wedding photographer. “For me, having flexibility with these funds is important.”

Following advice from a financial adviser, the couple instead opened a brokerage account. This option appealed to them because it allows access to funds for emergencies or other expenses beyond just education.

Traditionally, 529 college savings plans have been the go-to option for parents aiming to build a college fund. These tax-advantaged accounts cover a variety of education-related costs, including tuition, books, and private K-12 schooling. Unused funds can also be transferred to other family members.

Yet, as questions arise about the value of higher education and concerns grow about locking money into a restricted use, an increasing number of parents are reconsidering their approach. Many now seek more versatile savings vehicles that provide broader access to funds for their children’s futures.