Comparing college savings options

Saving for college is challenging enough. With so many options, finding the right savings strategy is crucial. In addition to 529 plans, college savings alternatives include UGMA/UTMA accounts, Coverdell Education Savings Accounts, and Series EE and Series I savings bonds. As you can see from the comparison chart below, a 529 plan offers benefits not typically found in other types of education accounts.

  New York's 529 Advisor-Guided College Savings Program UGMA/UTMA Custodial Accounts Coverdell Education Savings Account Series EE and I Savings Bonds
Tax-free withdrawals for qualified education expenses YES NO YES YES Footnote1
New York State income tax deductions on contributions YES NO NO NO
No age limits on beneficiaries or contributors YES NO NO NO
Flexibility to change beneficiaries YES NO YES YES
Account owner control no matter what the beneficiary's age YES NO NO YES
Assets intended specifically for education YES NO YES NO
Assets removed from estate without losing control Footnote2 YES NO NO NO
Tax-free accelerated gifting YES NO NO NO
Minimal impact on financial aid eligibility when parent owned YES NO YES YES
No income limits restricting eligibility YES YES NO NO

Begin footnote 1 content.Return to footnote reference 1 Covers tuition and fees only. Costs of room & board and books are not eligible expenses. Additional restrictions apply.Return to footnote reference 1End footnote 1 content.

Begin footnote 2 content.Return to footnote reference 2 Assuming account owner and contributor is the same person.Return to footnote reference 2End footnote 2 content.

Can other people contribute to my account?
Yes, family and friends can contribute to your existing account, or open their own account if they want the tax benefits and control. However, all account balances together for a beneficiary cannot exceed $375,000. After that, accounts can grow only through investment earnings.
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