Most people know they can save for their children's college educations through a 529 plan, but what isn't so widely known is that 529s can be used to pay for adults to go back to school as well.
A 529 plan is an investment account that allows people to set aside money, pre-tax, for college expenses. Individuals can sign up for their own state's 529 plan or shop around to other states. Many companies give their employees the opportunity to deposit money from their paychecks into a 529 plan.
"There's in excess of $160 billion invested in 529 accounts," said John Heywood, principal and head of the Vanguard Education Savings Group. Between 25 and 50 percent of all dollars people save toward their kids' or grandkids' college funds is saved in a 529 plan, he added. "The penetration of this product as a tool for savings has been substantial, starting from virtually zero in 2001."
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