How To Save for College With A 529 Plan

College Savings
Saving for College with a 529 Plan

The cost for higher education continues to grow. On average, students pay $7,020 per year in tuition and fees for public in-state colleges ($11,528 for out-of-state). And if your child is attending a private four-year college? Expect to pay $26,273 per year. And these costs will continue to rise.

Between 2000 and 2010, tuition increased at an average annual rate of 4.9 percent beyond general inflation—more rapidly than in either of the previous two decades.

Luckily, a number of options exist for you and your child to save and pay for college. One savings vehicle that continues to grow in popularity is the 529 plan. Created in 1996 and named after Section 529 of the Internal Revenue Code, a 529 plan is an education savings tool operated by a state or educational institution.

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