- While 65% of parents and future parents are saving for their children’s future using a savings account, less than a quarter (24%) are using a 529 plan.
- Among parents and future parents who are not contributing to or considering a 529 plan, the most common reason is that they have either never heard of it or don’t know what it is (43%).
- Other reasons parents and future parents are not contributing to or considering a 529 plan include concerns about the uncertainty of higher education’s future (18%) and the state of student loans/loan debt, leaving them to question if college is the right path for their children (16%).
Raising kids is a significant financial commitment, and for some, the associated costs influence decisions about whether or when to have children. Among these expenses, education often ranks as one of the largest and most unpredictable. Yet, many parents may feel uncertain about the most effective ways to save for these costs, or whether they’re even worth saving for.
According to a new study conducted online by The Harris Poll on behalf of Intuit Credit Karma, among 933 U.S. adults ages 18 and older who are parents of minors, currently expecting a child, or plan to have children in the future (referenced as “parents and future parents” throughout), 66% say they are currently saving for their children’s future. While 65% of parents and future parents are saving for their children’s future using a savings account, less than a quarter (24%) are using a 529 plan – also known as a tax-advantaged savings account used to pay for education expenses, including college, K-12 tuition, apprenticeships and student loan repayment.
Decoding the hesitation around 529 plans
While lack of awareness is the most common reason parents and future parents give for not contributing to or considering a 529 plan – 43% of those who aren’t contributing to or considering using a 529 plan admit they’ve either never heard of one or don’t know what it is – this only tells part of the story.
Many parents and future parents who aren’t contributing to or considering using a 529 plan also don’t fully understand how they work. For example, more than 1 in 6 (18%) aren’t contributing to/considering one because they didn’t realize the funds can be used for education expenses beyond college, such as K-12 private school tuition or trade and vocational programs. Additionally, about 1 in 7 (14%) aren’t contributing to/considering one because they worry that using a 529 plan could affect their children’s eligibility for financial aid. This lack of clarity may explain why some parents and future parents prefer other savings or investment options. Roughly 1 in 6 (17%) aren’t contributing to/considering one because they prefer more flexible investment options, which could be related to the 15% who aren’t contributing to/considering one because they feel 529 plans come with too many restrictions and penalties.
Not to mention the economic factors that may be causing parents and future parents to think twice about contributing to or opening a 529 plan. These include concerns about the uncertainty of higher education’s future (18%), the state of student loans and student loan debt (16%) or doubts about the current post-grad job market (13%), leading them to question whether college is the right path for their children.
Parents have a plan B
Just because many parents and future parents aren’t using, or don’t have plans to use, a 529 plan doesn’t mean they aren’t thinking ahead. If their savings fall short when it comes time for college, they have alternative strategies in mind.
In many cases, parents and future parents who are saving but not using/considering a 529 plan will put some of the responsibility on their children, whether that means encouraging them to apply/assisting them with applying for scholarships or grants (37%), recommending they start at a community college and transfer later (29%), or having them take out student loans in their own names (22%).
Others plan to stretch their own resources to fund their children’s education endeavors. Nearly a third (31%) say they would dip into other savings or investment vehicles, while others are willing to take out student loans themselves (19%), relocate to lower living costs or qualify for in-state tuition (15%), refinance or take out equity in their home (14%), or even reduce or postpone retirement contributions (13%).
Saving for the future isn’t attainable or top-of-mind for all parents
About one-third (34%) of parents and future parents say they aren’t saving for their children’s future, and for most, it’s simply because they cannot afford to (67%). Other reasons that are contributing to their inability to save for their kids’ future include having experienced job loss or unstable income (22%) or prioritizing the financial needs of other family members they are caring for, such as aging parents (14%).
For others, saving just isn’t a priority – at least not yet. A quarter (25%) say they aren’t currently saving because it feels too early to start, while one in five (20%) admit they haven’t really thought about long-term financial planning for their children at all.
“Raising children is expensive, especially when it comes to education-related costs, which can be among the largest and most unpredictable expenses families face,” said Courtney Alev, consumer financial advocate at Intuit Credit Karma. “It’s crucial for parents to start saving for their children’s future, if they can. Even small, regular contributions can grow substantially over time. While there is no one-size-fits-all approach to saving, exploring options like 529 plans can be beneficial, as these tax-advantaged accounts allow funds to be used toward non-college expenses, including K-12 tuition and eligible vocational programs. Ultimately, how parents choose to save depends on their goals and preferences, but understanding all the available accounts and tools available can help them make the most informed decisions for their children’s future.”
Methodology
This survey was conducted online within the United States by The Harris Poll on behalf of Credit Karma from July 17-21, 2025 among 933 U.S. adults ages 18 and older who are parents of minors, currently expecting a child, or plan to have children in the future. The sampling precision of Harris online polls is measured by using a Bayesian credible interval. For this study, the sample data is accurate to within +/- 3.8 percentage points using a 95% confidence level. This credible interval will be wider among subsets of the surveyed population of interest. For complete survey methodology, including weighting variables and subgroup sample sizes, please contact pr@creditkarma.com