Previously we were discussing tried and true strategies to save up for college expenses. Given the rising cost of most college tuitions, the complexity of college loan agreements and the difficulty for most middle-income families in simply maintaining their budget for ordinary daily household expenses, this is an important topic to consider at the earliest possible stages of a child’s development. In the second part of this discussion we cover another established method of helping to accomplish this goal: the 529 college savings plan.
The 529 college savings plan is a focused method to save and set aside money specifically for the purpose of funding higher education. It is a tax advantaged investment program designed to help cover future qualified education expenses. Established under Section 529 of the Internal Revenue Code, this type of educational savings plan was enabled by Congress in 1996 and is administered by state agencies and organizations. Basically, it offers flexibility, control and tax advantages and is available to anyone who wishes to make contributions for qualifying higher-education expenses without income limits. These expenses may include tuition, room, board, books and certain fees.
