The woke university is starting to seem less and less essential for Americans across the country. With college costs continuing to climb and the long-assumed value of a degree increasingly in question, a growing number of American parents are turning away from traditional 529 college savings plans in favor of more flexible financial tools, according to a new report from The New York Times.
Asha Bailey, a 29-year-old wedding photographer, and her husband, Adam Roberts, initially considered a 529 plan before rejecting it. The couple worried about its limitations—namely, that the funds can only be used for education. “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,” Bailey said. “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, Bailey and Roberts opened a taxable brokerage account. The couple now contributes $500 per month for their two young children—ages two and eight months—and the account has grown roughly 20 percent over three years. “I’m hoping that I made the right decision for them,” Bailey told the Gray Lady.
In Kansas City, Missouri, 36-year-old life insurance agent Mical Marshall made a similar decision—opting for indexed universal life insurance policies for her daughters, ages 9 and 6. Her choice was shaped by personal experience: her parents and grandparents funded a 529 for her, but she never used it after dropping out of community college. “If there’s a season where life is hard, they lost their job, this product that I built for them can meet that need,” Marshall explained to The Times. “It’s not just this one avenue. It’s not just college.”
The trend reflects broader anxieties over the return on investment of higher education, particularly as economic volatility, inflation, and job market shifts raise doubts about future earnings. New research from the Bill & Melinda Gates Foundation, HCM Strategists, and Edge Research reveals that public confidence in the value of a college degree continued to decline in 2023, while trust in job training and professional licensing programs rose. The findings expand on a 2022 study by the same team, which documented falling college enrollment among 18- to 30-year-olds.
“The most striking findings in the 2023 study are the stark differences in attitudes between high school students and people who graduated from high school but did not pursue a college degree. Both groups ranked job training as more valuable than college, but the non-degree group was especially critical of higher education, ranking the 4-year college experience 15 points lower in value than the high school students ranked it,” wrote Forbes.
Although 529 plans still offer appealing features—such as tax advantages and the option to roll over unused funds—they remain underutilized.
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529’s are/were as bad as 401’s because every cent put into them is locked away, or more appropriately put into the governments General Fund and the government gives you a “useless paper record” I.O.U.. The accounts are called “self directed” but you really have no control over using them. If you want to take money out over your RMD you will be taxed. If it’s your money and you are supposed to be in control why should the government have any say at all ?? It’s because the money you put in account is gone, immediately.
Wonder when Yale & Harvard merge?
NYU & Brown Univ
USC & UC system to save college venture
Raze the colleges, reuse land
Or reuse for housing
Colleges nationwide
Update degrees IE Science, Business, Engineering Minimum