Why 2026 Is the Year to Rethink Your College Savings Strategy

A sharp decline in teens viewing college as their next step is prompting financial planners to recommend more flexible savings strategies, even as new federal loan limits loom for graduate students [1]. In 2024, less than half (45%) of teens pictured a two-year or four-year college as their next step, down from 73% in 2018 [1]. Concurrently, immediate college enrollment for high school graduates has fallen to just over 6 in 10, down from 70% in 2009 [1]. Despite this shift, certified financial planner Jeff Judge advises that saving for education remains critical, stating, 'AI changing the job market doesn't mean a degree is worthless — it means the cost of not having options is higher than ever' [1]. Planners still endorse 529 plans for their tax benefits and the ability to change beneficiaries, but now suggest a blended approach. Judge recommends funding a 529 to cover 50% to 70% of projected in-state costs, while keeping 20% to 30% of college savings in a taxable brokerage account for greater flexibility [1]. This structure avoids the control issues of custodial accounts, a point underscored by planner Trevor Ausen: 'I don’t know about you, but when I was 18, that money would’ve been gone so fast' [1]. New federal loan restrictions add urgency to savings. Starting in July 2026, medical school students will be limited to $200,000 in total federal loans, a sum below the $228,959 average cost for 2025 graduates [1]. With Grad PLUS loans eliminated, planner Catherine Valega warns students may be forced into private loans [1]. The consensus is to save early and structure accounts to pivot, revisiting plans when a child is in high school [1].