It's less expensive to save for college than to borrow, and there are many options when it comes to putting aside money for education.
Section 529 College Savings Plans allow you to avoid some taxes on money saved for higher education. A custodial 529 plan of a dependent student is treated as an asset of the parent on the Free Application for Federal Student Aid (FAFSA). This means it has a LOW IMPACT on financial aid eligibility.
Be aware that 529 Plans are investments that involve risks, may have fees and expenses, and leftover money can be expensive to extract.
Custodial Accounts are considered assets of the student and therefore have a HIGHER IMPACT on financial aid eligibility.
Great comparison tool here of 529 Plans.
Please note that this was written by a volunteer who is not an expert in this field. Fairview High School provides this resource on an “as is” basis and does not vouch for its accuracy.