Many experts consider a 529 plan the best way to save for college because of their favorable tax treatment. A 529 plan would usually not have to be reported on a FAFSA as long as the dependent student or their parent owns the account, but withdrawals may reduce the students financial aid package. Roth IRAs can also fund a college education, but the withdrawals count as income for financial aid purposes. Additionally, only contributions can be withdrawn at any time. Earnings would be subject to income tax and an early withdrawal penalty if the owner of the IRA is younger than age 59 1/2.