529 Plan
Also called: 529, college savings plan, education savings account
A 529 plan grows tax-free and pays out tax-free for qualified education costs, with many US states adding a deduction for contributions. It counts far more lightly than a custodial account in financial-aid formulas because it's treated as a parental asset. Beneficiaries can be changed to another family member, and unused balances can now be rolled into the beneficiary's Roth IRA within limits — which removes the old objection about overfunding.