FRESNO, Calif. (KFSN) — From tuition and student fees to room and board, paying for higher education can get expensive.
There are tools that can help you cover the cost without taking out a loan.
“Plans are typically used for higher education,” says The Academy of Financial Education CEO, Samuel Molina. “However, they’ve expanded to be used for K-12, vocational schools or apprenticeship schools.
A 529 account is a state-sponsored investment account designed to save for future education costs.
“You can buy pre-qualified tuition, so you’re locking in today’s tuition rates or you’re investing into an account over the next 15-20 years, depending on when your child decides to use it for college education,” Molina said.
Contributions grow tax-deferred, and withdrawals are 100% tax-free when used for qualified expenses, including college tuition, fees, books or up to $10,000 for K-12 tuition.
Molina says this is an option to inflation-proof your savings for higher education.
“Education might rise at a 5% rate every year, so you need to keep that money growing at a faster rate than college education or apprenticeship schooling,” he said.
Anyone can open an account for a beneficiary.
Should that child not spend the entirety of the account or decide they don’t want to pursue higher education down the road, you have options.
“You can use it for their high school time, and you can also switch it over to a Roth account if the account has been open for 15 years,” Molina said.
It can also be transferred to someone else in the family.
“These maintenance fees are really low, so not only are you having a tax-exempt investment account, the maintenance fees are really low, so it allows you to grow more rapidly,” Molina said.
Like other investment accounts, it’s important to keep in mind that the 529 plans are subject to market ups and downs.
Your investment choices are usually limited to a set menu offered by the plan administrator.
For news updates, follow Vanessa Vasconcelos on Facebook, X and Instagram.
Copyright © 2026 KFSN-TV. All Rights Reserved.