Once an account is established, anyone can contribute to that account. Any person interested in pursuing post high school training and educational opportunities may be designated as a beneficiary of an account. Parents can save for their children. Grandparents can save for their grandchildren. Aunts and uncles can save for their nieces and nephews.
Friends can save for their friends.
Account holders will be able to contribute to a designated fund with deferment of federal income taxes on investment earnings. For designated beneficiaries who are Arizona residents, funds are exempt from state taxation when used to pay qualified higher education expenses of the designated beneficiary. Investment income earned on accounts is subject to federal income tax at the beneficiary's student rate when withdrawn for payment of qualified postsecondary education expenses. In developing the program, flexibility was an important consideration. Funds from a designated account can be used to enroll in and graduate from higher education institutions anywhere in the country.