529 schemes increase 8% in Q2 2025 before a change in large rules.

In the three months ending on 30 June 2025, 529 college savings and prepaid schemes saw one of its strongest period of development over the years. The latest data from ISS Market Intelligence has a $ 568 billion of $ 568 billion, which is more than $ 508 billion, 16.8 million accounts and a year ago. This is one 7.9% increase in accounts and 11.8% leap in total assets during the same period,

This makes this boom notable that this happened First Full effect of One Big Beautiful Bill Act (OBBBA). The new law signed in July 2025, quite widespread what the family can pay with 529 funds. Historically focusing on higher education, 529 schemes will soon be able to cover some workforce training programs, licensing examination fee and professional credential costs. The law also extended what is also allowed for primary education.

The second half of this expansion has the ability to accelerate account opening and contribution in the second half of the year, especially among families who see 529 as a tax-up way to invest in both traditional education and career-centric training.

Record has an influx for 529 schemes

Net inflow (contribution minus withdrawal) is a total $ 4 billion in 529 savings schemes, more than $ 3.6 billion during the same quarter of the previous year and more than $ 3.8 billion in 2023. Increased shows both high contributions and stable withdrawal by families using funds for increased expenses.

The flexibility of funds flowing in 529 schemes is notable, especially given instability in financial markets in 2024 and 2025. Families maintain their commitment to long -term education savings, even between interest rates and market performance.

Industry analysts say that the 529 scheme of this strength comes from the increasing awareness of flexibility. In recent years, MPs have added new qualified expenses, such as K -12 tuition, apprenticeship and limited rollover Roth Ira. OBBBA’s workforce training provisions are the latest in this series of changes.

How OBBBA expands qualified expenses

Starting with the withdrawal after July 4, 2025, 529 funds can be used to pay for the sustainable education required to maintain professional and technical training programs, licensing exams and professional credentials. Examples include CDL training, HVAC certification, CPA exam fee, bar examination preparation and sustainable education for teachers, nurses or financial advisors.

In addition, 529 scheme withdrawal for K-12 education can now include more than tuition! This includes course materials, tuition, and more. And starting in 2026, the limit of K -12 expenses increases to $ 20,000 per year.

It is important to note that state tax treatment may not be aligned with these new federal rules. States such as California and Colorado have historically refused to follow some federal 529 expansion, which means that residents may face state taxes on some withdrawal, even if they are punished at the federal level.

529 schemes will probably continue to grow

By adding workforce training to the list of qualified expenses, policy makers are opening the door to more families to use 529 accounts. This includes adult learners changing career, professional looking for advanced credentials and students planning to participate in trade schools rather than four -year universities.

Even existing professionals such as Financial Advisor and CPA can use a plan to pay for their continuous education requirements (and perhaps get tax deduction to do so).

It also creates new planning opportunities for families. Parents can start funding 529 accounts knowing that it can pay a day for their child’s college degree, a professional certification, or even a change in future career in adulthood.

From the perspective of an industry, the latest quarterly data confirms a multi-year tendency: 529 savings schemes are attracting more families, both account number and growing in total assets. As Q2 2025, the total assets of $ 568 billion in savings schemes are $ 543 billion, with the remaining $ 25 billion with prepaid schemes.

Policy shift from OBBBA may encourage states and schemes to marketing 529S for new demographics, including employers who want to use them as part of the workplace profit package.

With the capacity of comprehensive eligible expensive expenses and retirement account rollover, the appeal of 529S is expanding well beyond the parents of college-bounds.

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