Smart Strategies

Compare savings options and pick the best place for your college dollars.

Gone are the days when saving for college meant opening a custodial account or collecting low-yielding savings bonds. With college costs climbing about 5% per year, parents have to save more aggressively and take advantage of every tax break. In recent years, Congress and state governments have responded with new rules and options designed to help. But so many choices and changes can be confusing. So to help you pick the best plan, here's a report card for the entire class of college savings options.

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Simultaneous Savings
You can contribute to a state savings plan and an ESA in the same year. You also can receive a Hope Scholarship or Lifetime Learning credits (which together can shave up to $9,000 off your four-year bill) in years when ESA funds are withdrawn.

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