For anyone trying to figure out the best ways to save for a child’s future college costs, SavingForCollege.com used to be the go-to source of information. However, as reported by Mainstreet.com, Morningstar has become a valuable added source.
I can’t say one site is better than the other; both have their advantages. Both offer helpful articles and both provide details of each state’s 529 plans. I like the fact that SavingForCollege provides an overall rating for each plan, and it has the best college cost calculator. However, Morningstar’s plan descriptions and articles seem more up to date. I’d recommend using both sites when learning how to best save for college and choose an appropriate savings vehicle.
Two related notes. First, Mainstreet.com offers a helpful list of online tools for choosing a school and navigating the college application process.
Second, if you’ve been using a Coverdell Education Savings Account to invest for K-12 education expenses, you’ll need to use up that money this year. As noted by the Chicago Tribune, starting next year the only tax-free, penalty-free education expenses that can be paid with such money are college costs.
That’s my understanding, Mitch – beginning January 2011 you won’t be able to use earnings from a Coverdell account for K-12 education expenses without paying taxes and a penalty. You can read more here: http://www.savingforcollege.com/bankrate_articles/article.php?article_id=112
I’m sure glad I read this part of your blog since my daughter starts this fall at a Lutheran area high school and we started a Coverdell account several years ago. Does the change you mention take place as of January 1, 2011?