What to Know About All the Popular College Savings Plans
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Cathie Ericson is a freelance writer who covers personal finance, education, real estate and other topics of interest to consumers and businesses. Her work appears on websites that include U.S. News & World Report, MSN, Business Insider, Forbes, Market Watch, Fast Company, Realtor.com and more.
It's no secret that college costs are escalating, which means that student debt is increasing. In fact, . If the money is used for any other reason, you will pay a 10% tax penalty.
Anyone can open a 529 plan as there are no age or income limits. It also means that if you plan to attend a school in several years, you can start saving today, although you will gain the most from the tax advantages 鈥� and the fund's growth 鈥� if you're saving over a longer period of time.
One element of opening a 529 savings plan that can be confusing is deciding which state's plan to sign up for. Each state administers its own plan, but that doesn't mean you are limited to the state where you live, or that just because you buy a certain state's plan, that you are locked into attending a school based there. You can use your 529 to pay tuition at any accredited school, including online institutions.
The various plans have different cost structures and investment options so you'll want to