My granddaughter started her sophomore year Tuesday. I bought the laptop. My son did not ask, and I did not offer to discuss it.

That is how it happens in most families I know. The bill appears. Somebody with room in the account handles it. That account usually belongs to the oldest person at the table.

Look at what the country spent this month.

 

That last figure is the one I keep turning over. Half the country tells surveys it has never understood what a 529 plan is.

A 529 is a savings account for school costs. The money grows untaxed. It also comes out untaxed when it pays tuition, fees, books, or a dorm room.

For years the version a grandparent owned carried a nasty flaw. Money pulled out of it counted as the student’s own income on the aid form. Every dollar could cost fifty cents of aid.

That rule is gone. The aid form no longer asks. On the 2026-27 application, a grandparent account is invisible to the federal formula.

Two aid cycles have passed since that changed. Fourteen percent participation says the news never reached the people it was written for.

The second door is older and simpler. Tuition paid straight to the school is not a gift in the tax code’s eyes. Any size, no limit.

Write the check to the bursar, not to your son. It sits outside the $19,000 a year you can hand any one person without paperwork.

Then the third door, the one most of us used this month. A card at the register. School supply aisle. August.

What a grandchild’s tuition does to the cohort’s own order.

So who has been waiting at door number one?

Every state 529 plan is run by an investment firm under contract. The firm takes a small annual slice of everything in the accounts.

A grandparent who opens one at 68 leaves that money in place for a decade or more. Nobody trades it. Nobody watches it. The fee collects itself.

Now the limits, because they are real. Fees on these plans vary by state, and a bad plan can eat the tax break it promised.

More than two hundred private colleges use their own aid form, and that one still counts a grandparent’s account. Ask the school before you assume anything.

And this one I feel in my own chest. Money you give away at 68 is money you do not have at 84. That is the year the aisle in front of you gets expensive.

Nobody at that register is doing that arithmetic. Do it before October, when the aid forms open and the asking starts again.

The arithmetic

Record back-to-school and back-to-college spending of $146.8 billion, split as $43.3 billion for kindergarten through high school and $103.5 billion for college: National Retail Federation and Prosper Insights and Analytics, annual survey released July 2026. The personal savings rate near 2.8 percent against a long-run average of 8.4 percent: National Retail Federation analysis, July 2026. The finding that 52 percent of Americans are unfamiliar with 529 plans and 14 percent use or intend to use one: Edward Jones survey, 2025. Grandparent-owned 529 distributions no longer reported as student income, effective with the 2024-25 aid year and confirmed for the 2026-27 application: FAFSA Simplification Act and the current federal aid form. Tuition paid directly to an institution excluded from gift tax treatment: Internal Revenue Code section 2503(e). The $19,000 annual gift exclusion per recipient for 2026: Internal Revenue Service. More than 200 private colleges using the CSS Profile, which still counts grandparent accounts: College Board. Reading the register as the third door is Boomers Trade’s own framing.

 

The laptop is bought. I would buy it again. What I want is for the next one to go through a door built for the purpose. Not the door that happened to be open on a Tuesday afternoon in August.

Andrew

Boomers Trade is written by someone getting older right alongside you, and watching who profits from it.