Ways to Save for College

Changes to the Coverdell ESA in 2011 could result in the death of the plan. Unless Congress steps in, the Coverdell will no longer be eligible to fund elementary and high school tuition. In addition, when using the Coverdell to pay for college, you may not be able to take advantage of valuable tax credits.

Last year, Congress passed a bill that allows for the use of tax credits with 529 plans but did not include the Coverdell in the bill. Coverdells seem to be ignored because of their low contribution limits (currently $2,000 per year) but hopefully Congress will take notice of the importance of private primary education funding and do something to preserve this very useful savings account.

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