Nevertheless, college is a big cost, especially if you have more than one child. Most parents say they want to avoid Moffitt's experience. That's why 529 plans are starting to become popular. To those promoting the plans, the rising popularity of 529s is no surprise. Most States Offer Two Types of 529 Plans If you're interested in 529 plans, there's plenty of information out there for you.
Most states offer two kinds of plans.
The first, a prepaid tuition plan, lets you pay today's tuition rates for your child's college education, even if she won't be entering college for 18 years. That can mean big savings. If your child chooses not to attend the school for which you've pre-paid tuition, she can use the money at any other school. There may be a penalty, however. The second type of plan invests your money in a managed account of stocks, bonds and money market securities.