How 529 Plans Encourage Higher Education Among Underserved Groups
A closer look at some recent initiatives.
529 college savings plans are state-sponsored programs that families can use to save and invest for education. Unlike using a traditional brokerage account, families who invest in a 529 savings plan can grow their money over time without incurring capital gains taxes, as long as withdrawals are used for qualified education expenses. Although designed for all education savers, these plans are often used by well-resourced households, who learn about the benefits through general financial planning.