Saving for College Once Felt Essential. Some Parents Are Rethinking Their Plans.

The New York Times ^ | July 26, 2025, 5:01 a.m. ET | Kailyn Rhone

[E. Pluribus Unum]

Generations of parents have opened 529 plans to save for their children’s educations. Now some are reconsidering the value of college and looking into other options.

Before starting a family, Asha Bailey and her husband were already looking for the best ways to plan for their future children’s financial security. In their community in San Diego, 529 college savings plans often came up in conversation.

Wanting to learn more, Ms. Bailey and her husband visited their credit union to explore opening a 529 account. But when they learned that the plan could be used only for educational purposes, which their children might not require, they weren’t thrilled.

“As much as I would love and want to encourage my kids to go to college and further their education, it just might not be what they end up doing,” said Ms. Bailey, 29, who works as a wedding photographer. “I have no idea the kind of people that they’re going to grow up to be. So, for me, I want to have the most flexibility with that money.”

Instead, Ms. Bailey and her husband opened a brokerage account after her financial adviser recommended it to them. They liked the idea of withdrawing money in case of emergencies or other expenses not related to just education.

For generations, 529 college savings plans were a no-brainer for most parents wanting to start a college fund. They are tax-advantaged and primarily used to pay for higher education expenses. The accounts can be used for a range of education-related expenses, not just college tuition, like books, private K-12 tuition and more. If funds go unused, the account can be transferred to another beneficiary, like a sibling or a grandchild.

But now, some parents are pumping the brakes on the accounts and rethinking how they plan to save for their children’s...

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TOPICS: Education
KEYWORDS:

[DugwayDuke]

The military offers all sorts of college education benefits.

[yldstrk]

We had regular Schwab accounts for our kids—only problem was that we had to file tax returns every year. Still, two used them for college, one did not. Two had money left over after college and just strolled away with it.

[Georgia Girl 2]

The year before I graduated HS my Mom took a perfume job at the church. She and my Dad used that money to send me to college. Not one dime of borrowed money. I went To grad school free because I worked at the university.

[Brian Griffin]

As far as I know only one young homeowner on my Florida street has gone to college.

[Brian Griffin]

In the past, parents bought apprenticeships for their children.

[dfwgator]

So I think what I hear you saying is that the 401k was a big factor in the rise of the bean counters running businesses, with emphasis on short-term profits at the expense of long-term results.

[KarlInOhio]

The 401(k) was the worst thing to happen to the US business world since the Great Depression

I would love to hear your reason for that. I had thought that eliminating pensions and shifting both the risk and most of the expense to the employees was a huge money saver for companies. The only negative was eliminating what was left of employee loyalty to stay until retirement rather than job hopping.

[GingisK]

That’s why trade schools are far better options than college.

That depends entirely upon interests and goals.

[Vermont Lt]

Yes. The “analysts” for these funds determine what they think the profits should be. They come into meetings with the Executive management and tell them, “We value your company at X% growth next year. If you dont hit that we will sell our ownership.”

They control SO much capital that if they decide to sell their shares of your stock, your stock price will tank. Then your company is in BIG trouble.

So, these analysts who don’t work for the company and dont always know what is going on, can literally kill a company with a single stroke of their pen.

In the case I was involved in, the press to keep growing meant that we had to keep buying smaller companies…lay people off.. and really make our interfaces with our customers less “friendly”. In the banking business, this lead to consolidations and more corporate crap. If you wonder why your local bank turned to crap 20 years ago…thank the analysts.

We were able to keep ahead of the pressure. We kept buying smaller banks and absorbing them. It worked until it didn’t. Then we got bought and “boom”, service tanked, more people lost their jobs, and management moved further from the customer and deeper into “penny pincher mode.”

But…the folks working at the local [Whatever] enjoyed a fine return on their 401(k) that year. But they were also the ones calling in and complaining about their fees and the service people’s inability to do anything about it. Until the service people were off-shored….and all contact was simply automated.

That is why I think they are bad for the country and business specifically. But…its cheaper for the C-suite…so “it must be good.”

[MIchaelTArchangel]

I am old enough to remember when people who went to college paid their tuition and living expenses. That was before all the government programs (other than the GI Bill) that induced parents to think they had to foot the freight for their spawn to go to college. Those programs (and the parents) shifted the cost of college from the student to the parents which in many cases resulted in the students treating college as if it were a country club not an educational institution.

[DIRTYSECRET]

**Billions of dollars are just handed over to those people every week. Without question and without a whole bunch of accountability.**

If folks are busy working and their portfolio is making money shouldn’t they be happy?

[E. Pluribus Unum]

The real problem came when the feral government hijacked the student loan business and handed out loans like candy to dumb 18-year olds.

The universities could charge anything they chose, and the dumb 18-year olds would borrow it and hand it over to them.

[oldtech]

You are saying the 401K was a bad plan? I guess I never had one and I didn’t understand the problem(s). I didn’t get in on the one I could have had as the company was not contributing enough to do any good. Also, most of the time I didn’t make enough to make it anywhere near worthwhile either. Also ,that tells me that the company I worked did not do a decent job of explaining the plan. In fact, it was never explained to me.