Article

As a child, declaring what you want to be when you grow up is one of life’s treasured moments, full of hope and possibility. Declaring a major in college, however, tends to be a bit more complex.

For many students, it’s a balance between pursuing a passion and securing a stable financial future. Starting in 2026, that choice will carry new weight: under upcoming federal policy changes, colleges will be allowed to limit how much students can borrow in federal loans based on their major.

The shift could protect some students from over-borrowing in fields where average earnings are lower, but it could also leave families with larger funding gaps to fill. That’s where 529 accounts enter the picture. These flexible, tax-advantaged accounts are available to help families prepare for the changes and help ensure students can pursue the education that’s right for them.

Why Colleges Are Limiting Loans by Major

For decades, students could borrow a set amount each year regardless of their major. But not all majors lead to the same earning potential.

Graduates in fields such as engineering, business, or computer science historically have  secured higher-paying jobs, making it easier to repay student debt. On the other hand, students in majors like criminal justice, liberal arts, social services and education often earn less early in their careers, which increases the risk of default.

To curb this imbalance, colleges will soon be allowed to cap federal loan amounts by program or major. For example, a student studying social work may not be able to borrow as much as one pursuing computer science.

What Loan Caps Mean for Students

For families and students, these caps may create new challenges:

• Reduced access to federal loans. Students in certain majors may no longer be able to borrow enough to cover tuition and living costs.
• Increased reliance on other funding sources. Families may need to step in with savings, scholarships, or private loans to close the gap.
• Greater emphasis on financial planning. Majors tied to lower starting salaries will require extra foresight to ensure students can graduate without unmanageable debt.

This shift means that financial planning will matter more than ever. A major choice won’t just influence your career path. It may also impact how much financial aid families can access.

How Your Invest529 Account Can Help Close the Gap

529 accounts are specifically designed to make paying for education more manageable, and they offer significant advantages in light of the upcoming loan caps.

• Flexibility across majors. No matter what your student chooses to study, Your Invest529 account can be applied toward qualified expenses.
• Coverage for more than tuition. Beyond tuition and fees, 529 savings can be used for room and board, textbooks and technology.
• Tax-free growth. Contributions grow tax-deferred, and withdrawals for qualified expenses are tax-free.

Reduced reliance on private loans. By using an Invest529 account, families may avoid high-interest private loans that often fill the gap when federal aid falls short.

For parents, contributing to an Invest529 account gives you peace of mind that your child won’t be boxed in by financial aid restrictions. For students, knowing you have savings available allows you to choose a major that excites you, without worrying that limited borrowing will stand in the way.

The Power of Early Saving

One of the biggest advantages of a 529 plan is time. The earlier you begin saving (even $25 at a time) the more potential those dollars have to grow thanks to the power of compounding.

Parents: If your child has already expressed interest in a field like social services, education, or the arts, starting or boosting Invest529 contributions now can prepare you for potential tighter loan limits later.

Students: You can also play a role by contributing part of your earnings from summer jobs, babysitting, or part-time work. Even small amounts add up, and can help with your financial awareness.

Flexibility Beyond College

Another benefit of 529 savings is the versatility. Even if your student changes their mind, or takes a different path altogether, the money won’t go to waste. For example, 529 funds can be used at trade schools, apprenticeship programs and community colleges. Related: What 529s Cover

Loan caps by major are coming, and they will reshape the way students and families finance higher education. But by saving early and strategically in an Invest529 account, families give students the freedom to choose the major that’s right for them.