- On 20 Nov 2011
- By Chiante Mataitusi
What Is A 529 Plan?
Another Way To Fund Your Scholastic Dream
Find out how to save money on college tuition.
How A 529 Plan Can Help You With College
Parents need to save for college for their kids from a young age. Tuition and fees have been increasing year after year while the economy remains a challenge. With a 529 Plan there are ways to get started on saving up for college expenses.
What is a 529 Plan?
Families can save money through a 529 plan that allows tax-free financial contributions to the plan with the goal of using the funds to pay their child's college tuition. 529 plans are available in every US state.
Any earnings kept within the 529 plan are not taxed, and all withdrawals for qualified educational expenses are federal income tax-free. These tax advantages can greatly enhance the amount you have to spend on college.
Your 529 plan beneficiary can use the money to pay for tuition, certain housing costs, books, and mandatory fees.
Students can open their own 529 Plan, but the benefits are slightly offset by the way your financial aid package is calculated. Student assets are always used at a higher rate than parent assets when it comes to figuring out financial aid.
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