529 Plans Expand: $595B AUM, K-12 Limit and Roth Rollover
Assets in 529 and ABLE accounts reached $595 billion in Q1 2026; annual K‑12 withdrawals rose to $20,000 and up to $35,000 can move to a Roth IRA.
Total assets held in 529 college savings plans and ABLE disability accounts reached $595 billion in the first quarter of 2026 across 17.9 million accounts after several legislative and regulatory changes expanded eligible uses.
ISS Market Intelligence reported 17.1 million 529 accounts holding roughly $569 billion and 246,000 ABLE accounts holding about $3.3 billion in Q1 2026. Net inflows into 529 plans were $2.5 billion in the quarter, up from $2.2 billion a year earlier.
At the start of 2026 the annual cap on qualified K‑12 withdrawals doubled to $20,000 per student from $10,000. The change allows tax-advantaged funds to cover a broader set of private school expenses, tutoring and specialized educational services.
Under the Simplified FAFSA rules introduced for the 2024–25 cycle, 529 accounts owned by grandparents no longer must be reported on the federal aid form and distributions from those accounts are not counted as student income. The change can affect expected family contribution calculations and financial aid eligibility for some households.
A lifetime rollover provision lets account holders move up to $35,000 of unused 529 funds per beneficiary into a Roth IRA. That provision was adopted starting in 2024 and is fully in effect in 2026. Separate tax-code adjustments permit so-called superfunding contributions of up to $95,000 for individuals or $190,000 for married couples filing jointly to a 529 plan in a single year without triggering gift taxes, using five-year gift-tax averaging rules.
Market share remains concentrated among a small number of managers and plans. Program managers with the largest Q1 2026 assets were Ascensus with $155.2 billion, American Funds with $104.9 billion, TIAA with $83.5 billion, Fidelity with $56.3 billion and the State of Utah with $29.2 billion. At the plan level, CollegeAmerica 529 Savings by American Funds led with $104.9 billion, followed by New York 529 Direct (Vanguard) at $50.4 billion, Vanguard 529 at $43.3 billion, My529 Utah at $29.2 billion and UNIQUE College Investing Plan (Fidelity) at $28.1 billion.
ABLE accounts grew from about $2.5 billion the prior year to $3.3 billion and the number of ABLE accounts increased alongside broader awareness of the program.
ISS Market Intelligence forecasted continued growth in the sector over the next three to five years, citing the expanded list of qualified expenses and recent regulatory changes as factors influencing demand.
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