In 2018, 56% of parents surveyed reported saving for their children’s college.
A third of families (33%) used college savings plans to help pay for college.
As of June 2022, there were 15.9 million 529 accounts in the U.S.
The average 529 balance was $25,903.Note Reference 
Less than half of parents (43%) and one-third of students (31%) could correctly identify 529 plans as college savings accounts.Note Reference 
Every state except Wyoming has a 529 plan.
Five states account for almost half (48%) of the money saved in 529 plans in the entire U.S.
College costs have soared in the past few decades. Today, the average cost of college is nearly $36,000 per year. Plus, tuition has more than doubled in the past 30 years. If you’re trying to save for your child or grandchild’s future education, it’s hard to know how to prepare.
College savings accounts, such as 529 plans, are specially designed to save money for higher education. They come in the form of investment portfolios —which grow or shrink with the stock market — and prepaid tuition accounts, which can lock in future tuition costs at today’s prices.
This report covers information and statistics about college savings plans. Then we’ll dive deeper into the most popular college savings accounts: 529 plans.
College Savings Plans Statistics
In 2018, Sallie Mae and Ipsos surveyed over 2,000 parents with children under 18 about how they saved for college. They found:Note Reference 
- 56% of parents were saving for their children’s college.
- On average, parents had saved $18,135 for their child to attend college.
In 2022, Sallie Mae and Ipsos surveyed nearly 2,000 college undergraduates and their parents about how they paid for college. The survey found:Note Reference 
- 33% of families used college savings plans (such as a 529) to help pay for college.
- The average college savings plan amount they used to help pay for college was $6,872.
- On average, college savings plan holders could cover 10% of the total cost of college.
Types of College Savings Plans
Savers can use a variety of college savings plans to help pay for college, including:
- 529 College Savings Plans: Tax-advantaged, state-sponsored investment accounts that gain or lose money with the stock market.
- 529 Prepaid Tuition Plans: A
pay now, save laterapproach, where you can lock in the current tuition rate for your child or another beneficiary to attend college in the future.
- Coverdell Education Savings Accounts (ESAs): Tax-advantaged savings accounts available through banks — only folks making under a certain income can apply, and you can’t invest more than $2,000 a year.
Savers also might use other means to save for college, like starting an investment account that isn’t designated for college savings or keeping money in a general savings or checking account.
In 2018:Note Reference 
- 30% of all college savings were held in 529 college savings plans.
- 22% were in general savings accounts.
- 14% were in investment accounts, but not specifically college savings investment accounts.
- 8% were in prepaid tuition state plans.
- 2% were held in Coverdell ESAs.
- The rest were held in various other ways, from general savings accounts to piggy banks to bonds to bitcoin.
However, most college students and their parents aren’t familiar with the ins and outs of specific college savings plans.
- In 2022, less than half of parents (43%) and about one-third of students (31%) correctly identified 529 plans as savings accounts designed for education savings.Note Reference 
- Only 17% of college students and their parents correctly identified Coverdell ESAs as savings accounts designed for education savings.Note Reference 
College Savings Plan Balances by Age
Say your child or grandchild is very young and many years away from college. Then, any money they have in a college savings account has plenty of time to grow. You could keep their savings in a riskier investment since there’s more time for their funds to recover if the stock market takes a hit.
If your child is older, there’s less time for their money to grow. There’s also less time to recover from a dip in the stock market, so you’ll probably look at more conservative (lower risk, lower reward) investment options.
On average, parents who opened a college savings plan for their children had more money saved the older their children were.
|Child’s Age in years||Average Amount Saved in a 529 College Savings Plan||Average Amount Saved in Coverdell ESA||Average Amount Saved in a Prepaid State Plan|
College Savings Plan Use by Income
On average, wealthier families were able to contribute more to their children’s education using a college savings plan.
- On average, families making over $150,000 a year contributed four times as much money to their children’s education from college savings plans than families making less than $50,000 a year.Note Reference 
- Families making over $150,000 a year used college savings plans to cover 15% of their children’s college expenses.Note Reference 
- Families making less than $35,000 could cover 6% of their children’s college expenses with college savings plans.Note Reference 
|Family Income||Average Contribution|
|Less Than $50,000||$1,267|
College Savings Plan Use by Race and Ethnicity
White students and their families used more money from college savings plans to pay for college compared to Black and Hispanic or Latino/a families:
- On average, white families used college savings plans to cover about one-tenth (11%) of their children’s college expenses.Note Reference 
- Black families used college savings plans to cover 4% of the total cost of college.Note Reference 
- The average amount white families spent on college using college savings plans was about 3.6 times as much as Black families and nearly double Latino/a families.Note Reference 
|Race/Ethnicity||Average Contribution||Average Percent of Total College Cost Met|
529 College Savings Plans
The College Savings Plan Network (CSPN) is the leading source for information about 529 college savings plans. According to CSPN:
- As of June 2022, there were 15.9 million 529 accounts in the U.S.Note Reference 
- In total, Americans had $412.5 billion saved in 529 plansNote Reference  — a steep decrease from June 2021’s total balance of $464.3 billion.
Average 529 Balance and More Savings Statistics
- In June 2022, the average 529 balance was $25,903.Note Reference 
- In June 2021, the average 529 balance was much higher at $30,287.Note Reference 
- The vast majority of 529 funds are in 529 college savings plans, not 529 prepaid tuition accounts. Americans held over $388.2 billion in college savings accounts and about $24.2 billion in prepaid tuition accounts.Note Reference 
- 38% of 529 accounts were receiving automatic contributions as of June 2022.Note Reference 
529 Balance Over Time
The average 529 balance has generally increased over the years.
The average 529 balance has only decreased during the economic downturns of 2008 and 2022.Note Reference  It’s possible that more people were drawing money out of their 529 plans to return to school during the 2008 recession. People also could have paused contributions to 529 plans in uncertain economic times.
Between December 2021 and June 2022, the total assets held in 529 plans dropped by about $68 billion — the largest dip in recent history.Note Reference 
When Sallie Mae asked parents in 2018 why they weren’t using 529 college savings plans, the most popular responses were:Note Reference 
I don’t have enough money to save in that type of account.(22%)
I don’t know enough about 529 college savings plans.(19%)
I would rather save for college a different way.(12%)
More Facts About 529 College Savings Plans
- Every state except Wyoming has a 529 plan.Note Reference 
- Washington, D.C., also offers a 529 plan, and there is one non-state-affiliated 529 plan for private colleges.Note Reference 
- According to the Financial Industry Regulatory Authority (FINRA), you can deduct your contributions to a state-sponsored 529 plan from your taxes in more than 30 states.
- Normally, you can’t give someone more than $15,000 in a year without getting taxed for it. Not so for 529s! You could contribute a lump sum of $75,000 to someone’s 529 plan in a year without paying a gift tax. (That said, you won’t be able to make tax-free gifts for the next five years.)Note Reference 
- You can use up to $10,000 of a 529 plan to repay qualified student loans.Note Reference 
- You can also spend money from some 529 college savings plans on K-12 education expenses.Note Reference 
529 plans can be direct-sold or advisor-sold. Many states have both options available.
- In Direct-Sold Plans: You choose or change your investments yourself. These typically have lower fees than advisor-sold plans.
- In Advisor-Sold Plans: An investment pro can help you make decisions to maximize savings and your tax breaks. These plans typically come with higher fees than direct-sold plans.
Additionally, each state’s 529 plan offers a variety of portfolio options you can choose to invest in, including:
- Aggressive, Moderate, and Conservative Portfolios: The more aggressive the investment strategy, the higher the risk and the potential reward
- Target-Date Portfolios: Target portfolios focus on maximizing your investment for a specific year, like your child or grandchild’s high school graduation.
- And Many Other Options
Did You Know…
529 plans aren’t just for kids.
- 28% of parents who are saving for their own education are using 529 plans.Note Reference 
- Nearly three-quarters of parents who have 529 plans to pay for their own college also use them to save for their children’s college.Note Reference 
529 Balances by State
States where residents have the most savings in 529 plans aren’t necessarily states with the largest populations.
States with the most college savings include:Note Reference 
- Virginia ($85.2 billion)
- New York ($40.2 billion)
- Nevada ($34.7 billion)
- New Hampshire ($21.5 billion)
- Utah ($18.3 billion)
In June 2022, these five states alone accounted for nearly half (48%) of money saved in 529 plans in the U.S.
Find the total 529 balance for each state in the map below. You can also search through the following table to find more information about 529 plans in that state.
Frequently Asked Questions About 529 College Savings Plans
What is a 529 college savings plan?
529 college savings plans are investment accounts that come with tax advantages, like being able to deduct contributions and qualified withdrawals from your taxes. They’re typically state-sponsored, and savers can choose their investment portfolios based on how much risk or fees they’re willing to take on.
What are the best 529 college savings plans?
The best 529 plan for you is generally the one that can offer you the greatest tax benefit while maximizing your investment and charging the lowest fees.
It’s also a matter of preference. Would you rather put your savings in a high-risk, high-reward account or a more conservative one?
Check out 529 plans in your state of residence first. In most cases, those offer the biggest tax breaks and charge the lowest fees.
How much should I be saving for college?
In one survey, parents reported saving an average of $18,135 for their child to attend college.Note Reference  Your savings might look different if you’re saving for yourself in the near future or if you’re saving for a graduate degree, like a master’s degree.
The average total cost of college in 2020-2021 was $35,551 a year at four-year colleges, and it’s been getting higher every year.
The cost of college also varies greatly depending on the type of school someone plans to attend: two-year or four-year, private or public. Four-year private colleges are the priciest. Two-year public colleges tend to be the least expensive.