Empowering Families with Education Savings and a 529 Plan

By Arizona Treasurer Kimberly Yee

May 27, 2025

As many states, like Arizona, experience population and job growth, addressing the need for higher education to prepare a qualified and skilled workforce is essential. Higher education comes with costs. That’s why it’s crucial to prepare families to start saving early for their loved ones’ future education and create a plan and pathway for these savings.

In October 2020, I became the Administrator of the AZ529, Arizona’s Education Savings Plan. Since then, my office has opened over 54,000 new accounts and increased assets by 45%. From day one, it has been my goal to bring this important savings plan to families who have never thought about college or higher education and provide the encouragement that higher educational opportunities are for everyone.

As I travel around Arizona, I meet with individuals in schools, business and education groups, senior citizens, and veteran communities to discuss the benefits of opening an AZ529 Plan. Expanding the awareness of the AZ529 Plan included developing online marketing and materials translated into Spanish and Navajo, which has been an extraordinary success.

Many are unfamiliar with information on eligibility. I share that parents are not the only individuals eligible for tax benefits; any contributor, including grandparents, aunts, uncles, and friends, may receive tax deductions. Additionally, I encourage young professionals who do not yet have their own families to open an account for a niece or nephew or even for themselves, as accounts may be used for ongoing education, including graduate degrees.

I have enjoyed many conversations with families who are now opening their AZ529 Plans with new confidence as they begin the first steps to planning their child’s future, whether their education will be in a university setting, community college, vocational school, workforce development, or apprenticeship program.

Setting up a 529 Plan is more important than ever as college and higher education costs continue to rise. Student loan debt has reached an all-time record high of $1.77 trillion nationally. The funds from a 529 Plan may be used for tuition and fees, books, supplies, room and board, and student internet access at postsecondary institutions across the country. Funds may also be used towards K-12 private school tuition and paying off student loans.

Recent additions by the federal SECURE 2.0 Act have addressed the common question asked by account holders: “What if I put too much into my 529 Plan and my child doesn’t use it all?” Now, 529 Plans allow account holders to transfer up to $35,000 tax and penalty-free to a beneficiary’s Roth IRA retirement account with longstanding 15-year holders of these accounts. This is good news and provides families with financial flexibility and peace of mind.

Making savings easy and accessible, and meeting families where they are positively impacts a child’s education and enhances our future workforce.

On May 29th, or National 529 Day, my office proudly celebrates education savings by surprising a family in Arizona with a special gift. During this time last year, we had the opportunity to surprise first-time parents and their newborn baby with $529 towards an AZ529 Education Savings Plan. As the new parents received this surprise gift and the newborn in their arms, it was a remarkable experience to see the family overwhelmed with joy and emotion.

The gift of a 529 Plan is more than just a financial contribution. It is a long-term investment towards a loved one’s future that will last a lifetime.