529 Plans Keep Getting Cheaper: 5 Key Takeaways From Our 2026 Study

Since their launch over 20 years ago, 529 education savings plans have helped students and their families better access higher education through tax-advantaged investing. Moreover, 529 plans have become relevant to an increasing number of investors as their use cases have expanded over the years (the most recent being Roth IRA rollovers).

In this annual review of 529 plan trends, we track key metrics investors should keep an eye on, including assets, fees, and more.

Takeaways on the 2026 529 Savings Plan Landscape

1. 529 industry assets hit $550 billion in 2025, up 11.5% from 2024.
2. Industry concentration remains high: Vanguard, Capital Group, and TIAA oversee more than half the 529 industry assets.
3. Most plans continue to offer a single glide path, and glide paths have grown steeper on average since 2022.
4. While many 529 plans come with reasonably low price tags, average fees declined further by 3 basis points to 0.43%.
5. Direct-sold plans continue to be cheaper than advisor-sold plans, with an average fee of 0.30%.

529 Industry Assets Continue to Grow

Investor assets in 529 plans grew to $550 billion by the end of 2025, 11.5% up from 2024’s $493 billion and setting a record for the industry. Direct-sold plans remained a favorite among investors, accounting for roughly 67% of 529 plan assets. They tend to be cheaper than advisor-sold plans, making them more attractive to investors looking to maximize savings. It also helps that they are accessible to investors who do not have a financial advisor. In contrast, advisor-sold plans held the smallest portion of industry assets in 15 years.

Winner Gets Most

Vanguard, Capital Group, and TIAA remained the top three program managers by assets. Together, they oversaw 55.7% of the total 529 plan assets as of December 2025. Vanguard remains the most widely represented manager across the 529 landscape with its low-cost fund offerings. Capital Group’s high-quality funds, strong reputation, and distribution capabilities helped the plan pass the $100 billion mark in assets. TIAA rounds out the top three, reflecting its continued growing strength as a 529 program manager and its appeal to states looking for scale, operational focus, and cost-conscious investment menus.

Most 529 Plans Do the Thinking and Choosing for Investors

Many 529 accountholders take a hands-off approach, relying on age-based or target-enrollment portfolios to manage their asset allocation over time. These portfolios start equity-heavy when the beneficiary is young and gradually shift toward bonds and cash equivalents as the child approaches college age. The schedule governing that transition is the asset allocation glide path, which is similar to target-date funds used in the retirement space.

Progressive glide path structures have become more common over the last decade, where allocations adjust incrementally rather than in large steps at certain ages. This lowers the overall risk of rebalancing a large portion of the portfolio at an inopportune time. For this comparison, we group plans offering a single age-based glide path alongside those using a progressive structure into a combined category labeled “Single Option.”

The majority of plans now coalesce around offering a single default glide path rather than multiple age-based tracks by risk profile. On average, these single-option paths begin with equity allocations around 90% for the youngest beneficiaries and wind down to the high teens around enrollment age, positioning them between the average “moderate” and “aggressive” tracks.

The Average Glide Path Steepens

Unlike target-date retirement strategies for which saving and spending timelines can vary greatly, 529s are typically used to fund a relatively predictable liability or spending goal. For example, investors saving for higher education will use most of their assets over a four- to five-year period, so enrollment-based 529 portfolios look to prioritize capital preservation as tuition payments come due. Meanwhile, tuition growth has typically outpaced headline inflation, and equity markets have climbed.

Glide paths have grown steeper to accommodate these joint needs for asset growth and spending certainty. On average, age-based portfolios now hold more equity risk early and shed it more aggressively later, compressing derisking into a shorter window at the end of the savings horizon.

Allocations in the early enrollment years have drifted higher, with the average starting equity stakes moving to 92.0% from 89.5%. Equity allocations near and during the enrollment period have declined, with equity stakes at enrollment falling to 18.3% in 2025 from 20.4% in 2022.

529 Plans Are Still a Great Deal for Investors

529 plans have meaningfully reduced their fees over the past several years, making it much cheaper to save for education in a tax-deferred way. Although the fee compression has slowed somewhat in recent years, 529 plans’ overall affordability remains a win to be celebrated.

From 2024 to 2025, the average fee for all age-based and target-enrollment 529 portfolios decreased from 0.46% to 0.43%. Both advisor-sold and direct-sold plans saw lower fees, with reduced average costs of 1 basis point to 0.79% and 0.30%, respectively.

Direct-sold plans retain a clear fee advantage over advisor-sold plans, the latter of which tend to use more actively managed funds and include sales and service charges, such as 12b-1 fees. On average, a direct-sold plan comes at a 62% discount to an advisor-sold plan. That said, some investors may prefer to have a financial advisor assisting their decision-making and are willing to pay for such guidance.