529 Education Savings Plans: More Flexible Than You Think

Written by

Edward Jones

• Published May 23, 2026 • Updated May 23, 2026

529 Education Savings Plans: More Flexible Than You Think

Quick Facts

What is a 529 education savings plan according to Edward Jones?

A 529 education savings plan, as explained by Edward Jones, is a tax-advantaged account to help families save for a child’s educational expenses, offering flexibility.

How are 529 plans more flexible than most people think?

529 plans can cover college, trade schools, apprenticeship programs, K-12 tuition, room and board, supplies, and even repay up to $10,000 in student loans.

What is the 2025 annual nontaxable gifting limit for 529 plans?

For 2025, individuals can gift up to $19,000 and married couples up to $38,000 per year to a 529 plan beneficiary without incurring gift taxes.

Which education costs qualify for 529 plan withdrawals?

Qualified expenses include tuition, room and board (for half-time students), books, computers, educational supplies, and up to $10,000 in student loan repayment.

Where can I compare 529 plan options and get expert advice?

Edward Jones recommends comparing state 529 plans for benefits and consulting a financial advisor to choose the best plan for your family’s goals.

Can I use a 529 plan for something other than college?

Yes! 529 plans are much more flexible than most people realize. You can use them for K-12 private school tuition (up to $10,000 per year), vocational and trade schools, apprenticeship programs, room and board for students enrolled at least half-time, books and computers, and even student loan repayment (up to $10,000 per beneficiary). This makes them useful for many different educational paths, not just traditional four-year colleges.

What happens to the money in a 529 if my child doesn't use it all?

You have several penalty-free options if money remains in the account. You can change the beneficiary to another qualifying family member like a sibling, grandchild, niece, or nephew. You can also roll the funds to another family member's 529 plan. If your child receives a scholarship, you can withdraw up to that amount without penalty. There's even an option to roll up to $35,000 into a Roth IRA for the beneficiary. So unused funds don't have to go to waste.

Who can contribute money to a 529 plan?

Anyone can contribute to a 529 plan—parents, grandparents, other family members, or friends. Contributions are treated as gifts, so most people stay within the annual nontaxable gifting limit ($19,000 per individual or $38,000 for married couples filing jointly in 2025). Many parents actually prefer receiving 529 contributions as gifts from loved ones for birthdays, holidays, and special occasions.

Is a 529 plan worth setting up for my kids?

Many families find 529 plans valuable because they offer significant tax benefits—earnings grow tax-free when used for qualified educational expenses. Plus, they're more flexible than you might think, covering not just college but K-12 tuition, trade schools, apprenticeships, books, computers, and student loan repayment. According to Edward Jones research, 1 in 4 parents currently invests in a 529 plan. The key is understanding all the ways you can use the funds and the penalty-free options if money remains.

Can I set up one 529 account for multiple children?

Yes, you have flexibility in how you structure your 529 savings. You can maintain separate accounts for each child, which makes it easy to track individual balances, or you can use one account for all your children. You can also easily change the beneficiary between family members if needed. The best approach depends on your family's situation and preferences.

Edward Jones creative content Planning for your child’s education can feel overwhelming, but a 529 education savings plan offers a powerful way to build a financial foundation for their educational future.

One in 4 parents currently invests in a 529 plan, according to 2025 research by Edward Jones and Morning Consult. Perhaps it’s because of the tax benefits — earnings are generally tax free if the money is used for qualified educational expenses. Or perhaps it’s because of their flexibility.

Types of Education

While most people know 529 plans can help cover college and university tuition, these versatile accounts can also pay tuition for vocational and trade schools, making them suitable for students pursuing careers in skilled trades like plumbing, electrical work or culinary arts. Additionally, some apprenticeship programs qualify for these funds. And even K-12 tuition expenses are covered, up to $10,000 per year for private, public and religious elementary and secondary schools.

Beyond Tuition

Withdrawals from a 529 plan can move beyond tuition and cover the cost of room and board for students enrolled at least half-time. They can help pay for books, computers and qualified educational supplies. And a big surprise for some: A 529 plan can help with student loan repayment up to $10,000 per beneficiary.

Who Can Contribute

Fortunately, 529 plans welcome contributions from anyone — parents, grandparents, other family and friends. Contributions are treated as gifts to the beneficiary, so most contributors will want to stay within the annual nontaxable gifting limit (which for 2025 is $19,000 for individuals or $38,000 for married couples filing jointly).

Interestingly, 1 in 5 parents would prefer for their child to receive 529 contributions as gifts from loved ones, making these accounts perfect for birthdays, holidays and other special occasions.

Multiple Children

If you have multiple children, you have options in how you structure your 529 savings. You can maintain separate accounts for each child or use one account for all your children.

Unused Funds

You may be concerned about what happens if your child doesn't use all the money. Fortunately, these accounts offer numerous penalty-free options. You can easily change the beneficiary to another qualifying family member, including siblings, nieces, nephews, grandchildren or even yourself as the account owner.

*Refers to income taxes, and assumes you meet the qualifications for the options (e.g., you change the beneficiary to a qualified family member, your apprenticeship is a qualifying apprenticeship)

You can also roll funds to another family member’s existing 529 plan. If your child receives a scholarship, you can withdraw up to the scholarship amount without penalty (though you’ll pay income tax on a portion of the money). The IRS allows an option to roll up to $35,000 into a Roth IRA for the beneficiary if certain requirements are met. You should consult with your tax advisor on this 529/Roth IRA rollover issue.

State Options

It’s important to note that 529 plans vary from state to state, and you’re not limited to your home state’s plan. However, it’s smart to examine your home state’s offerings first, as many provide special incentives like tax breaks for residents.

When comparing plans, consider factors such as tax benefits, fees, investment options and ease of use. A good financial advisor can help you navigate these choices and identify the plan that makes the most sense for your family’s specific situation and goals.

Edward Jones creative content

529 education savings plans offer flexibility and tax advantages that help make them an excellent tool for education planning. With their expanded uses and multiple options for unused funds, they can help provide families with both security and adaptability in preparing for their children’s educational futures.

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

Investments in 529 plans will fluctuate with changes in market conditions and may be worth more or less than the original investment when redeemed.

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