Last Updated on October 29, 2025 by Christopher Brown
I was sitting with a young couple at a coffee shop on the River Walk last spring, the humidity already starting to cling despite the morning hour. They were both teachers in the North East Independent School District, staring down the twin realities of their daughter’s brilliant smile and the looming cost of college, and the panic in their eyes was something I’ve come to recognize instantly after fifteen years in financial planning here.
You know what’s funny? In San Antonio, we talk a lot about family, about legacy, but we often freeze up when it comes to the actual numbers behind securing our kids’ futures. The heat isn’t just in the air; it’s in the pressure parents feel. And honestly, navigating the world of college savings plans can feel as confusing as the oneways downtown. But it doesn’t have to.
What a 529 Plan Actually Is (And Isn’t)
Let’s strip away the financespeak. A 529 plan is simply a special investment account for education savings. The money you put in grows taxfree, and when you take it out to pay for qualified expenses—tuition, books, even certain room and board costs—it’s completely free from federal taxes and, here’s the key for us, Texas state taxes.
I remember a client from Alamo Heights who came to me back in 2018, convinced a standard brokerage account was just as good. Wait — actually, let me rephrase that more clearly. He thought he was being smart by keeping “flexibility.” But when we ran the numbers, the tax savings alone from a 529 over 15 years would have covered an entire semester at UTSA. That one still stings a bit; I wish I’d met him sooner.
The biggest misconception? That this money is only for fouryear universities. The truth is, the rules have changed. You can use these funds for trade schools, community colleges like our Alamo Colleges District, and even for apprenticeship programs.
The TexasSized Choice: Your Two Main Options
Here in Texas, we don’t have a state income tax, which changes the calculus a bit. We don’t get a state tax deduction for contributing, which is a perk in many other states. So our main decision is between two types of 529 plans.
The Texas Tuition Promise Fund®
This is our state’s prepaid tuition plan. You’re essentially buying tomorrow’s college tuition at today’s prices. You lock in a unit of tuition, and the state guarantees it will cover that same unit in the future, no matter how high prices soar.
I’ve made this mistake myself with a client, so I know: this can feel like a fantastic safety net, and for some families, it is. But it’s also less flexible. It’s designed primarily for Texas public colleges. If your child dreams of an outofstate school or a private university, the payout is based on the weighted average of Texas public tuition, which might not cover the full cost.
The Texas College Savings Plan®
This is the educational savings plan, which works more like a 401(k) for college. You invest your contributions in a portfolio of mutual funds (you choose the risk level), and the value of your account goes up or down based on the market’s performance.
To be completely honest, for most San Antonio families I work with, from the sprawling new builds in Stone Oak to the established homes in Terrell Hills, this is the route we take. The growth potential is higher, and the funds can be used at any eligible educational institution in the country. The flexibility is just… better.
The San Antonio Reality: Starting Small and Staying Steady
Look, I get it. Between the cost of living and everything else, the idea of stashing away hundreds a month can seem impossible. But here’s an insider secret I tell every parent who walks into my office: consistency trumps amount. Every single time.
You don’t need to fund four years on day one. I had a single mom who worked at the Pearl who started with just $25 a month when her son was born. She set up an automatic draft and basically forgot about it. She got a few raises over the years and increased the contribution. When her son graduated from Reagan High School, that account had grown to over $18,000. She was so proud she cried. I did, too, a little.
The key is to make it automatic. Treat it like another bill, one you’re paying to your future. Set up that automatic contribution from your paycheck or checking account right after you open the plan. Out of sight, out of mind, and growing steadily.
What Most People Don’t Realize About 529s
But what most people don’t realize is how flexible these plans have become. It’s not the rigid lockbox it used to be.
K12 Tuition: You can use up to $10,000 per year per beneficiary for tuition at private, public, or religious elementary or secondary schools. This is a big one for parents considering private high schools here in the city.
Student Loan Repayment: A lifetime limit of $10,000 can be used to pay down the beneficiary’s student loans. (This can be a huge head start for a grad.)
Rollovers to ABLE Accounts: If the beneficiary becomes disabled, funds can be rolled into an ABLE account for disability expenses.
Change of Beneficiary: If one child gets a full scholarship or decides not to go to college, you can change the beneficiary to another qualifying family member—a sibling, a cousin, even yourself if you want to go back to school.
Funny thing is, I leaned back in my chair just last week thinking about a client from the Southside. They had overfunded their older daughter’s plan because she got a scholarship to Texas A&M. They were worried they’d be penalized. Long story short, we simply shifted the leftover funds to their younger son, no problem at all.
The Grandparent Gambit: A Powerful Local Strategy
This is a tip I give specifically to the many multigenerational families we have here. Grandparents can open their own 529 plan for a grandchild. This is powerful for a few reasons.
First, it doesn’t impact the parents’ ability to save in their own plan. Second, and this is the real insider bit, distributions from a grandparentowned 529 don’t have to be reported as student income on the Free Application for Federal Student Aid (FAFSA) under the new rules. This can significantly help with financial aid eligibility.
I’ve seen grandparents in the Boerne area do this brilliantly. They contribute instead of buying a mountain of toys for Christmas and birthdays. They’re building a legacy, not just adding clutter.
Local Providers and Resources in San Antonio
Based on actual local presence, here are some established providers in San Antonio where you can get started or get advice:
Texas College Savings Plan — The official state plan, available to all Texas residents.
Empower Financial Services — Serves the greater San Antonio area with financial advisors who specialize in education planning.
Edward Jones — Multiple offices across the city, including in the Alamo Heights and Stone Oak neighborhoods.
Frost Bank — A Texas institution with many local bankers who can guide you through the initial setup.
Anyway, the point is you have options right here in town.
The Real Cost and Getting Started
Since we don’t have state tax implications, the main cost to you is the contribution amount and the plan’s underlying fees. The Texas College Savings Plan has an annual assetbased fee around 0.30% to 0.40%, which is pretty competitive. Most families I see here start by aiming to cover about onethird of the anticipated future costs, hoping for scholarships, grants, and student work to cover the rest.
A realistic starting point? If you have a newborn, aiming for $150 to $250 a month can put you on a strong path to covering a significant chunk of public university costs. But again, start with what you can. $50 is better than $0.
Rules and Verification
This is all governed at the state and federal level. For the most straightforward, direct route, you can go through the official state website. It’s always wise to doublecheck any financial advice.
You can verify information and open an account directly through the Texas Comptroller’s website for the Texas College Savings Plan.
For broader federal rules and regulations, the U.S. Securities and Exchange Commission (SEC) provides investor education materials.
Common Questions from San Antonio Parents
What if my child doesn’t go to college?
You have a few choices. You can change the beneficiary to another family member. You can even use it for yourself. If you withdraw the money for a nonqualified expense, you’ll pay income tax and a 10% penalty on the earnings portion only—you’ll never be penalized on your original contributions.
Will this affect my child’s financial aid?
It can, but how much depends on who owns the account. A parentowned 529 is assessed at a maximum rate of 5.64% on the FAFSA, which is relatively favorable. A grandparentowned one, as I mentioned, doesn’t count as student income under the current rules.
Is there a minimum to open an account?
For the Texas College Savings Plan, you can open an account with as little as $25 if you set up automatic contributions, or $250 without. It’s designed to be accessible.
Can I use it for schools outside of Texas?
Absolutely. The funds can be used at any eligible institution across the country, and even some foreign universities. The school just needs to be qualified to participate in federal student aid programs.
So here’s the thing. The hardest part is always just starting. The paperwork feels daunting, the choices feel big. But in my fifteen years of helping San Antonio families, I’ve never once had someone regret starting a college savings plan. I’ve had plenty regret waiting.
The sun’s going to keep rising over the Missions, and our kids are going to keep growing. The best time to plant this particular tree was years ago. The secondbest time is today. If you’re in San Antonio, start by just looking at the Texas College Savings Plan website. It’s the first, and most important, step off the porch.