The best 529 plans for 2026 can be valuable tools for saving for college (not to mention valuable estate and retirement planning tools). So, if you're looking for ways to save for your child or grandchild’s future college expenses, you may have considered opening one of these tax-advantaged plans.
Tax-free uses for 529 funds have expanded over the past several years to include other educational costs, including tuition for kindergarten through 12th grade and apprenticeship programs. The One Big Beautiful Bill Act, signed into law over this past summer, has further extended the ways you can use 529 money, including a wider range of postsecondary educational programs.
But how do you choose the right one?
529 plans allow you, the contributor, to prepay a beneficiary's qualified higher education expenses at an eligible educational institution or to contribute to an account for paying those expenses. 529 plans are gaining traction as a premier education savings tool because, despite being funded with after-tax dollars, all investment growth is tax-free.
However, 529 plans can vary. To select the best one, you’ll need to choose which type of plan makes sense for you by comparing tax breaks, benefits for state residents, fees, contribution options, withdrawal restrictions and investment options. Choosing the right plan takes research, but it’s worth it. An easy place to start is by checking out these top-ranked 529 plans.
Best direct-sold 529 plans
Direct-sold 529 plans are issued directly from a state financial institution. If you choose one of these plans, you’ll be responsible for managing your own investments within the plan’s online account portal. For this reason, these plans are often cheaper than investor-sold plans.
In its November 2025 report, Morningstar awarded its highest Gold Medalist Rating to the top direct-sold 529 plans, citing their low costs, strong investment options, and exceptional stewardship for 2026.
- Utah's my529: Known for low fees, customizable options and strong oversight.
- Illinois' Bright Start Direct-Sold College Savings Plan: Offers cost-effective index options, diverse fund lineup, and high-quality management.
- Alaska's T. Rowe Price College Savings Plan: Features actively managed portfolios from T. Rowe Price with strong long-term performance potential.
- Massachusetts' U.Fund College Investing Plan: Managed by Fidelity, with very low-cost index funds and solid age-based options.
- Pennsylvania's PA 529 Investment Plan: Vanguard-managed with ultra-low fees and excellent passive investment choices.
Best advisor-sold 529 plans
Advisor-sold 529 plans are available through an investment firm. These accounts typically charge a higher fee, but financial advisers manage the plan’s investments for you. Some savers feel these accounts are worth the extra cost because of the access to professional investment advice, actively managed investments and flexible portfolios.
According to Morningstar's latest 529 ratings,released November 2025, no advisor-sold plans earned the top Gold Medalist Rating. (All five Gold-rated plans are direct-sold due to their exceptionally low costs, strong oversight and investment quality).
Even so, several advisor-sold plans received the next-best Silver rating, making them strong options for those working with a financial advisor.
Top Silver-rated advisor-sold plans highlighted in Morningstar's report include:
- Ohio's BlackRock CollegeAdvantage 529 Plan: Features a solid lineup with BlackRock funds, good risk management and competitive fees.
- Virginia's Invest529 (advisor-sold version, also known as CollegeAmerica): Managed by Capital Group American Funds, with strong long-term potential. It's the largest 529 plan overall.
Other notable advisor-sold plans may also earn Silver or Bronze ratings, such as the Illinois' Bright Directions program, which was upgraded recently and is quite popular for its low fees.
Check out the full Morningstar 529 ratings report for detailed comparisons:
529 prepaid tuition plans
Another college savings option worth considering is a 529 prepaid tuition plan. This type of plan lets savers prepay tuition at today’s tuition rates at eligible public and private colleges or universities. According to FINRA, "Most states guarantee that the funds you put into a prepaid plan will keep pace with tuition."
Prepaid tuition plans only cover tuition expenses, unlike 529 plans, which cover other qualified expenses, like room and board, books and supplies. You can fund these accounts with one lump sum or through installment payments. Often, these plans must be used within 10 years, or the interest on initial contributions could be lost.
As of early 2026, there are 18 state-sponsored 529 prepaid tuition plans. However, many are closed to new enrollments, due to ongoing funding challenges.
Only seven state plans are currently open to new applicants, and all require state residency to participate.
Additionally, there is one national institution-sponsored prepaid plan, called Private College 529 Plan, which has no residency requirement, focused on participating private colleges.
- Florida: Stanley G. Tate Florida Prepaid College Plan. Popular, state-guaranteed and flexible for in-state and out-of-state use.
- Massachusetts: U.Plan Prepaid Tuition Program. Covers a percentage of tuition and fees at participating MA schools.
- Michigan: Michigan Education Trust - MET. Contract-based, covers tuition and fees at MI public institutions.
- Nevada: Nevada Prepaid Tuition Program. Locks in rates for credit hours earned and usable in-state or out of state.
- Pennsylvania: PA 529 Guaranteed Savings Plan. Credit-based, guaranteed growth tied to the increases in tuition.
- Texas. Texas Tuition Promise Fund. Covers tuition and fees at Texas public colleges, with limited enrollment windows.
- Washington. Guaranteed Education Tuition - GET. Unit-based and state-guaranteed. Recently reopened with favorable pricing.
529 plans can be part of your estate planning
Investing in a 529 plan is a great way for parents or grandparents to pass down wealth to the next generation. By helping college students graduate with lower or no student debt, you'll give your kids a leg up when it comes to starting their careers. For students interested in lower-income careers like the arts or non-profit work, graduating without debt may mean the difference between pursuing their dream career or slogging through a high-paying job they dislike to pay off debt.
Another benefit of a 529 college savings plan is its potential to jump-start your child's or grandchild's retirement savings. Thanks to provisions in the SECURE 2.0 Act, families can now roll over funds tax-free and penalty-free into a Roth IRA owned by the plan's beneficiary.
This rollover is subject to a lifetime limit of $35,000 per beneficiary, across all 529 accounts, and must meet several key conditions. The 529 account must have been open for at least 15 years, but contributions and earnings from the past five years are ineligible, and the beneficiary must have earned income at least equal to the rollover amount in that year.
Also, annual rollovers are capped at the Roth IRA contribution limit for the year — $7,500 in 2026. These numbers are reduced by any other IRA contributions the beneficiary makes.
This flexibility reduces the risk of overfunding a 529 plan and provides a powerful way to shift education savings to tax-free retirement growth.
What's not to like about this versatile savings tool? The annual contribution limit is that of the beneficiary, not the parents. Not all states have revised their rules to follow the federal government's expanded uses for 529s, so make sure to check your state's policies.
Be sure to read: How This 529 'Superfund' Strategy Can Transform Your Estate Plan
