Read our full analysis for a more in-depth look at these trends.
The 101 of 529
May 2023
Beyond student loans and grants, 529s remain a significant way to pay for education. We discuss five contribution trends.
Key takeaways
- 529 accounts have become an important source of funding for education but public data on contribution patterns is limited. As a result, we utilize Bank of America internal data on customer accounts outflow into 529 accounts and provide five observations on recent trends.
- Although student loans and grants remain the main ways to pay for education, there has been a 30% increase in Bank of America customers who actively put money into 529 accounts between March 2019 and March 2023. For a majority of those who invest in 529 accounts, they do so roughly twice each month, which could be concurrent to bi-weekly paychecks.
- Lower income households played catch-up in 529 plans participation over the last few years helped by fiscal stimulus and wage surges but the gap with higher income households remains notable. Specifically, there were five times more higher income households contributing to a 529 in March 2023 than the lower income and the median contribution size was also 2.8x more.
