
Legally known as “qualified tuition plans,” 529 plans are sponsored by states, state agencies, or educational institutions and are authorized by Section 529 of the Internal Revenue Code. They are a tax-advantaged way to save for a child's college education, and may also be used to save for K-12 private-school tuition. There are two types of 529 plans: college savings plans and prepaid tuition plans. All fifty states and the District of Columbia sponsor at least one type of 529 plan. In addition, a group of private colleges and universities sponsor a prepaid tuition plan.