Kate Ashford at NerdWallet wrote about why 2026 is the year to rethink college savings. Only 45% of teens planned to attend a two- or four-year college in 2024, down from 73% in 2018, as trades, apprenticeships and AI-driven job uncertainty reshape what families expect. New federal student loan limits starting in July 2026 add to the pressure. She asked how families should adapt.
My view is that AI changing the job market does not mean a degree is worthless. It means the cost of not having options is higher than ever. The goal of the savings plan is to make sure the 18-year-old can choose the path that fits, whether that is a four-year school, a trade program or a certification, without the decision being made by what the family can afford that month.
On the number: for most people, I suggest funding a 529 to cover 50% to 70% of projected costs at an in-state school. That leaves room for scholarships, part-time work, family cash flow and the possibility the child takes a path that costs less, without stranding money in an education-only account. Pair it with a taxable brokerage account for flexibility.
And for parents who feel behind, I always tell people, save what you can. A 529 opened at birth with $100 a month has 18 years of compounding behind it. The families who skip saving because they cannot fund the full projection are giving up the only variable that works in their favor, which is time.
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