529 Plans
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.