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Updated January 2022.

A 529 college savings plan account is a great way to save money for a child’s future education expenses. To really make the 529 plan account work for you, consider setting up an automatic investment program. And be creative. Here are some alternate ways you can expand contributions to your kids’ college savings funds.

What Does it Cost to Attend College?

Before we get too far ahead of ourselves about where to find additional funding for your kids’ college educations, let’s put this stuff into perspective.

The average cost of attending a public in-state school, where your child lives on campus, currently costs about $103,000 over four years. It’s closer to $175,000 if your kid heads out of state. And it’s a whopping $216,000 if he or she attends a private university.1

Now, bear in mind that 15 to 18 years from now those numbers could more than triple if tuition rates rise at the same pace they have for the last 20 years – right around 6.8%.2

Will you Have Enough Saved?

If you can afford to contribute $32,000 per year (the limit for a married couple to avoid federal gift taxes) to each of your children’s college savings accounts for the next five to seven years, then you might be okay. If not, then the rest of this story is for you!

Clearly you can contribute money to the college savings accounts you set up for your children. But other people can too. Nothing restricts who can contribute to your accounts.

Likewise, there is nothing restricting other people from opening their own accounts for your kids. In fact, they can do both.

Let’s explore this a bit more.

Watch Grandma and Grandpa Optimize the 529 Plan

Your parents (and your spouse’s) can be an enormous help getting your kids through college. This is because federal financial aid rules don’t include their 529 plan accounts in determining need-based financial aid. This can really help you optimize your 529 plans.

Timing grandparents’ withdrawals from 529 plan accounts to pay college expenses later in your kids’ college careers may help increase financial aid awards.

Happy Birthday and a Joyous Holiday Season

Wait! Before that first birthday, there’s a baby shower, right? What a great time to start a 529 college savings plan account. And what a great gift a contribution to your child’s future education makes.

You got it. The next great source of additional 529 plan contributions is your family and friends. And there is absolutely no reason for you to be reluctant about suggesting that they make contributions to these accounts in lieu of typical birthday and holiday gifts.

Look, when you throw a birthday party for your kids you absolutely know that the other parents will be bringing gifts. So, don’t be timid. Suggest the gift of education. You know the other stuff will come anyway. They’re your friends after all.

Tee up the Contribution you Never see

The third great source of additional 529 plan account contributions may come from your employer. If your company offers a sponsored 529 plan, take advantage of it! It will provide you an automatic payroll deduction. So, a portion of your wages will get directly deposited into your children’s 529 plan accounts.

Since the money never hits your paycheck, you don’t miss it and you can’t spend it…that is until the kiddos head off to college.

Now, technically, all your employer is doing with a sponsored 529 plan is facilitating the savings for you. The payroll deduction is just like the one for your 401(k). The account is funded with your own money. They’re just making it easier for you to save.

Keep Things Simple

To find out if your current college savings plan is on track, run your numbers through our Education Savings Calculator. To open a 529 plan account for your kids, call us at (800) 235-8396.


1 Source:, Average Total Cost of College, Updated: November 15, 2021.

2 Ibid.

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