Named after the section of the Internal Revenue Code that created them, 529 plans are designed specifically to save for college, offering various tax benefits and other important features. Generally the person who is funding the plan opens the account (account owner), designating an individual (beneficiary) for whom the funds will be used.

Key Benefits of 529 Plans

• You can generally enroll in any 529 plan regardless of where you or the beneficiary (student) reside in the United States.**

• Your Designated Beneficiary (student) can attend any eligible school in the country and even some schools abroad.

• There are a variety of Tax Advantages for investing in a 529 Plan.  Some of these tax advantages include tax-deferred growth, state tax advantages, and gift tax benefits.
  
  

Enjoy favorable financial aid treatment
While most savings and investments reduce a student’s eligibility for need-based financial aid, 529 savings plans generally receive more favorable financial aid treatment. That is because they are considered assets of the account owner, not the beneficiary. According to the federal financial aid formula, about 6% of parental assets, in contrast to 20% of students assets, are expected to be used toward a student’s college expenses.

Retain control
Unlike other savings plans for children, such as UGMAs and UTMAs, the 529 account owner always retains control — even after a beneficiary reaches majority age. You decide how to invest your contributions, when to make withdrawals and to whom they will be paid — to you, the student or directly to the school. You can change the beneficiary to another family member of the current beneficiary without any cost, tax or penalty. You can close the account at any time, although earnings on non-qualified distributions will be subject to income tax and a 10% federal penalty (only on earnings withdrawn). As the 529 account owner, you always retain control, even after the beneficiary reaches age of maturity.