Our Journeys as Parents: How We Saved (or Plan to Save) for Our Kids’ Education—Plus 529 Tips & Big Policy Shifts
When it comes to saving for college, there’s no one “right” way to do it. In fact, most parents are navigating their own unique mix of priorities, timing, and financial realities—and that’s exactly what Matt Carpenter and Peg Keough open up about in the latest episode of College! The Podcast.
In this heartfelt, practical episode, Matt and Peg share their personal journeys as parents trying to fund their children’s college educations. They also break down recent proposed federal financial aid cuts that could impact millions of families—and they clear up widespread misconceptions about 529 plans.
Whether you’re saving for college, planning to start soon, or wondering if you’re already behind, here’s a deep dive into the episode’s biggest takeaways.
Two College Savings Journeys—And Why That’s Okay
Matt and Peg each bring a deeply personal, honest perspective on saving for their kids’ education. Peg, with children now out of college, shares how her family started saving later than ideal—but made it work by prioritizing saving for college when they could. They began putting money aside once their twins were in elementary school, socking away lump sums when finances allowed. There were seasons of life when they couldn’t save at all, and others when they focused heavily on funding their 529 plans.
Matt, on the other hand, is still actively saving for his daughter, who’s 10 years old. His family’s approach has been shaped by cultural background, current financial priorities, and values. While not aggressively saving in a traditional way, they’ve chosen to invest in quality education and experiences now, trusting that with careful planning, they can still afford a solid college path—most likely through a cost-effective state university.
💬 Key takeaway: There’s no one-size-fits-all approach. Start where you are, save when you can, and let go of the guilt.
Big Policy Changes on the Horizon: What You Need to Know
Early in the episode, Matt and Peg shift gears to discuss significant federal education policy proposals that could impact how families plan for college in the years ahead.
🧾 Here’s what’s on the table:
- An 80% cut to the Federal Work-Study program
- A proposed reduction in the Pell Grant maximum from $7,395 to $5,700
- Ongoing efforts to reduce the Department of Education’s budget and shift responsibilities elsewhere
These changes are part of the proposed 2026 federal budget and broader legislation that’s still evolving in Congress. While these proposals aren’t final, Peg and Matt stress the importance of being informed and using your voice—by contacting your representatives and staying engaged in the process.
💬 Key takeaway: These proposed cuts could significantly impact low-income and middle-class families. Now more than ever, controlling what you can—including your own savings—is key.
Debunking 529 Plan Myths: What You Really Need to Know
If you’ve heard that having a 529 plan hurts your financial aid eligibility or limits your flexibility, you’re not alone. Matt and Peg spend a good portion of the episode setting the record straight on one of the most misunderstood college savings tools: the 529 plan.
✅ 529 Plan Basics:
- Tax-free growth on earnings
- No taxes on withdrawals when used for qualified higher education expenses
- Parent-owned 529 plans are treated more favorably in financial aid formulas than student-owned assets
- Contributions can be made automatically or in lump sums
- Can be used across state lines, even if it’s not your home state’s plan
They also point out a common mistake: trying to use 529 funds for travel or non-qualified expenses, which can trigger taxes and penalties. Peg emphasizes the importance of understanding qualified expenses—tuition, room and board, books, required tech, and more—while noting that airfare and transportation do not qualify.
❌ Common Myths, Busted:
- “Saving in a 529 means I won’t get financial aid.”
→ False. Parent-owned 529s are counted as assets, but only a small percentage is considered in aid calculations.
- “If I don’t use it for college, I lose all the money.”
→ Not true. You can change the beneficiary, use it for other family members, or now even roll some funds into a Roth IRA (subject to new IRS rules).
- “I have to use my state’s plan.”
→ You don’t. But you should check to see if your state offers tax deductions or credits before choosing an out-of-state plan.
💬 Key takeaway: 529 plans are powerful, flexible tools—when you understand how they work. Don’t let misinformation stop you from using one.
Aligning with Your Partner: One of the Most Overlooked Steps
Perhaps one of the most impactful (yet rarely talked about) themes of the episode is the importance of having the conversation—with your spouse or co-parent—about what you value, what you can afford, and how you want to approach saving for your child’s education.
Peg shares the story of a couple who waited until their child was in high school to talk about their vastly different assumptions about paying for college. Don’t let that be you.
Whether you’re planning to save a lot, a little, or just need a starting point, getting aligned is one of the most powerful steps you cn take. As Matt says, even if your strategy is unconventional or still evolving, making intentional decisions as a team sets the tone for everything that follows.
Final Thoughts: Start Where You Are, Stay Informed, and Give Yourself Grace
This episode is more than a financial planning conversation—it’s a reminder that there’s no perfect path. Whether you’re just getting started, navigating setbacks, or saving in unconventional ways, what matters most is staying informed, having honest conversations, and taking small, consistent steps forward.
💡 What’s Next?
👉 Listen to the full episode: Our Journeys as Parents: How We Saved (or Plan to Save) for Our Kids’ Education — Plus 529 Myths Debunked & Big Policy Shifts
👉 Subscribe to College! for weekly insights on financial aid, admissions, scholarships, and more.
