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529 Plans

A college student typing on her laptop

There are two types of 529 plans that can be used to save for college.

1. Prepaid Plans allow you to start contributing today for your child’s college education. By starting a plan today with the Prepaid Plan, you can lock in the cost of the tuition at today’s rate. If you are certain that you know what college your child will attend, call the accredited vocational school, college or university and speak with their financial aid department who can get you started buying tuition credits.

2. Savings Plans are the recommended option. These plans allow you to save tax-free for your child’s education at any accredited vocational school, college or university for any qualified education expenses like tuition, fees, books, and room and board (if the student is considered at least half-time when the funds are distributed). 

What you can expect

Both the Prepaid and the Savings Plans are easy to open and are managed by professional investors. You need to complete a simple registration form and you can easily link it to your bank account for direct deposit of your contributions.

The good news is that you can open a 529 account in any state, no matter where you live, but you’ll probably pay less in fees and maintenance when you open one where you live. If you make contributions to a fund in your state, you may get a tax deduction when you file your state taxes for that year, depending on the state. See which plans are in your state.

The bad news is that these funds can be counted towards your total household finances and may decrease your financial aid offering if the owner of the funds is listed as the student or the parent. If the funds are not used for qualified education expenses, you’ll have to pay tax on the funds and a 10 percent penalty.

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One can be found at They have AFFORDABLE plans to help you start saving for college for your child. And, I recently met someone with a success story.