The ability to make contributions is limited to an individual's level of adjusted gross income. Return to top. The assets can be utilized for educational purposes, although the child can ultimately use the funds however he or she wishes. Portions of the investment income may be taxed at the child's or the parent's rate, depending on the amount. Transfers are simple to establish and inexpensive to administer.
Assets placed in the account belong irrevocably to the child.
Once the child reaches the age of majority, he or she controls the account. Assets may or may not be spent on college. Return to top. Savings bonds for education You may save for your child's education by participating in the Education Bond Program established by the federal government. The program allows interest to be completely or partially exempt from federal income tax when used for qualified higher education expenses.