529 savings plans: making it easier for others to contribute to your college fund

March 23, 10:27 AMCollege Admissions ExaminerLauren Starkey

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This Monday's Money for College concerns 529 savings plans and how to maximize their effectiveness. Many families choose to save for college with these plans, primarily because of the attractive tax advantages. The money you earn is not subject to federal income tax, and as long as withdrawals are used for qualified higher education expenses, no income tax is taken from those funds either. Some states even give a state tax deduction or credit for contributions made to 529s. Check here for a state-by-state listing of specific plans.

Now, you can make it easy for relatives and friends to contribute to your 529. Gifts for birthdays, graduations, and other special events can be automatically added online through www.freshmanfund.org, bypassing the plan administrator and streamlining what had been a complicated process. You can search for registered students by name, or purchase a college tuition gift certificate for any student (registered with the site or not).