NerdWallet recommends using 529 plans to save for college. There are two types:
- 529 college savings plans are the most common type. Investments grow tax-free and can be withdrawn tax-free for educational expenses like tuition, room and board, and required textbooks.
- 529 prepaid plans let you prepay part or all of an in-state public tuition, locking in the tuition at time of payment.
Unlike retirement and other investment accounts, 529 plans are operated by each state, which makes searching for the best option fairly easy; if your state offers a tax deduction for contributing, you’ll likely get the most bang for your buck by contributing to its plan.
But a common misconception is that you have to contribute to your state’s plan. In reality, you’re free to choose any plan you’d like, so it’s worth comparing your options (and some states, like Colorado, offer more than one 529 plan).
We recommend direct-sold plans: They are sold directly by the state, rather than through an advisor, which translates into lower fees for investors. Below are two lists, one for each type of plan, showing all direct-sold 529 plans by state.
College savings plans by state
Prepaid plans by state
The minimum contribution to a prepaid plan depends on the cost of a credit or the monthly payment plan. Check the specific plan for the correct minimum.
|State||Plan name||State tax benefit?|
|Alaska||University of Alaska College Savings plan||No|
|Florida||Florida Prepaid College plan||No|
|Illinois||College Illinois! 529 Prepaid Tuition Program||Yes|
|Maryland||College Savings plans of Maryland – Prepaid College Trust||Yes|
|Michigan||Michigan Education Trust||Yes|
|Mississippi||Mississippi Prepaid Affordable College Tuition (MPACT) Program||Yes|
|Nevada||Nevada Prepaid Tuition Program||No|
|Pennsylvania||Pennsylvania 529 Guaranteed Savings plan||Any state’s plan|
|Texas||Texas Tuition Promise Fund||No|
|Washington||Washington Guaranteed Education Tuition (GET)||No|
|Private||Private College 529 plan||No|
Updated July 28, 2015.