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College Financing and Career Guide 2007
Financing for college
Don't despair! From student loans to college grants, there are many options for paying for an education.
Financing for college
Compare 529 plans and Coverdell

As the parents of a newborn baby, toddler or school-age child, you may be wondering which education savings plan is the best for you and your family. Today, parents have a choice between three tax-free plans for their children: a Coverdell education savings account, a prepaid tuition plan or a 529 savings plan.

If your children's grandparents are in a financial position to help fund your children's education, they can contribute to an account you set up, or they can set up their own account. In either case, funds saved in grandparent-owned 529s may not be considered when you file the Free Application for Federal Student Aid, or FAFSA.

There are five major factors to consider before making your selection. You need to look at the tax benefit, the financial aid impact, can the account can be rolled over, tax consequences and student loan implications.

Comparing college savings plans
529 savings plan Prepaid tuition plan Coverdell education savings account
Tax benefit
Who owns account?
Financial aid impact
Rollover status
Tax consequences
-- Posted: July 2, 2007
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