College is expensive and the options available to save for it are many. In fact, speaking of saving money during college life, a 529 college savings plan is advantageous to you.

The 529 plan can be funded with up to $60,000 per beneficiary per year, the beneficiary can be changed and the account is controlled by the parents. For financial aid purposes the account is considered an asset of the parents and not the child which provides a lower weighting in the financial aid process. I highly recommend that every parent and child research and understand the financial aid process.

Obviously, the 529 college savings plan provides key advantages in savings. At first, the earnings are allowed to accumulate tax-free. Besides, there is a 10% tax penalty on the earnings if the funds are used for purposes other qualified expenses. I like the penalty for two reasons, it is more difficult to withdraw money when you have to pay a penalty and even harder to tell the kids your new boat was once their college fund.

The 529 Plan is also an excellent estate planning option for the grandparents since they can use the annual gift exclusion of $12,000 to fund a non-taxable gift or can elect to fund up to $60,000 with a special five-year election. A couple can fund twice these amounts. For most of us, an automatic deduction of a much lower amount is the most likely mode of funding.

By visiting some comparison sites, you can examine different college savings plans, and choose one without commissions or with low commissions and low annual fees, which is a good way to keep more money in the 529 college plans. These will impact how much money you will have when your child ends up going to college. There may be an annual asset management fee or potentially yearly maintenance fees.

However, although parents might like the idea of saving money, students may not be as excited. Most students want to enjoy their college years because they can work for the rest of their lives and college is just a short chapter, compared with their whole life. At this time, a 529 college plan is becoming more valuable indeed.

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