Start a College Savings Account
All 50 states and the District of Columbia have plans that can help parents save for their children's college education. These plans include:
- Prepaid tuition plan in which you make payments that are invested to cover projected tuition costs when your child is ready for college.
- College savings plan, also known as a 529 plan, to which you make regular contributions that are invested and can be used to cover more college costs than just tuition.
Some states offer one type, some offer both. For the plans available in your state,
go to www.savingforcollege.com.
For college students and their families, the student loan interest deduction, Hope Tax Credit, and Lifetime Learning Tax Credit
can help relieve the burden of paying for higher education, perhaps by as much as several thousand dollars. For more information, call the IRS Help Line
at (800) 829–1040, read IRS Publication 970–Tax Benefits for Education, or consult your tax advisor.