Some States are Establishing Tutition Savings Plans More than 20 states have established some type of tax-favored higher education tuition savings plan, and a number of others are considering measures aimed at helping parents save for their children's college education. Though the plans differ from state to state, they all pool parents' contributions and invest these contributions for them.
Private investors administer the fund's resources.
Payments are set according to the age of the child. There are no income limits and the money can be used at any accredited college or university, but the plan does not guarantee to pay the full cost of a state-run college, as does a prepaid tuition plan like Alabama's. Contact your state's education department for information about the availability of tuition savings plans. For help with planning, use the handy calculators in our Education Funding section. You may also want to check out Web help for education funding plans .