When funds are used, they are taxed at a student rate, which is usually lower than a parent s. Families pay no taxes on the earnings, as long as the money is used for education expenses. For information, talk with a trusted financial adviser. For information, talk with your bank s investment officer. Pre-paid tuition plans allow parents to invest early for expected college costs.
Some states allow non-state residents to invest in the program.
Additionally, pre-paid tuition plans can now be used for room and board as well as for tuition. For information contact the College Savings Plan Network. This Web site provides details on state savings and pre-paid tuition programs. Before enrolling in college, explore all your financial aid options. Financial aid is offered by the federal and state government, as well as colleges and private groups.