529 Day Offers Bonuses To Start Saving For College
Across the country, May 29 marks a coordinated push to promote college savings accounts known as 529 plans. Created under Section 529 of the Internal Revenue Code, these plans offer families tax advantages to save for education, and this year, many states are sweetening the deal.
From cash bonuses to newborn giveaways, state treasurers and plan administrators are using the date to draw attention to long-term saving. The effort is backed by the College Savings Plans Network (CSPN), a group under the National Association of State Treasurers that tracks participation and manages outreach.
“It’s fitting that 529 Day falls during graduation season,” said CSPN Chair and Kansas State Treasurer Steven Johnson. “This time of year reminds us that the transition into adulthood often begins shortly after high school graduation. 529 Day celebrates the flexibility and tax-advantaged benefits of 529 plans, which remain one of the best tools families can use to help prepare their students for a successful future.”
A 529 plan is a type of investment account that allows money to grow tax-free when used for qualified education expenses. That includes tuition, fees, books, and even some housing costs at eligible colleges, universities, and trade schools. Some states extend benefits to K-12 tuition, student loan repayment, or even converting funds to a Roth IRA.
These accounts can be opened by parents, grandparents, or others on behalf of a beneficiary. Contributions are made with after-tax dollars, but many states offer a deduction or credit on state income taxes. There are no income limits, and funds can be transferred between family members if the original beneficiary doesn’t use the money.
As of the end of 2025, Americans had saved more than $600 billion in 529 accounts, according to CSPN. The continued interest reflects growing concern about student debt, which now totals nearly $1.8 trillion nationwide.
To mark 529 Day, most state-run plans are offering limited-time promotions or educational events. Some of the bonus offers include:
Other states may be offering live social media contests to podcasts and webinars. In Arizona, the state Treasurer is making surprise hospital visits to gift newborns their first 529 deposits. Others are inviting kids to draw pictures of their dream jobs or join summer baseball events to raise awareness.
With student loan forgiveness policies uncertain and college costs rising, families are increasingly turning to savings strategies that help limit future borrowing. A small but steady contribution into a 529 account can reduce the need for loans and build a sense of financial preparedness.
The plans also serve more than just college-bound students. Funds can be used for trade schools, apprenticeships, and qualifying certifications. They can also support adult learners returning to school later in life.
Even modest contributions matter. Many plans allow accounts to be opened with as little as $25. Some states even provide seed money to encourage participation, especially among lower-income families.
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