President Obama's aborted attempt to tax 529 plans may end up being a boon to the state-run college savings plans.
Widespread outrage at the proposal he floated in January - from both Democrats and Republicans - brought it down two weeks later. But all the nationwide media attention the college savings plans received gave them a much-needed boost in publicity.
Indeed, many parents don't know that the 529 college savings plans exist, which means that many families miss out on one of the best, tax-advantaged ways of encouraging education and limiting student-loan debt.
The plans allow families to invest money in tax-deferred accounts that can be used at any accredited college or university in the United States, and a few abroad.
Assets in 529 plans have grown steadily since the IRS formulated rules for them in 1996, and got a big boost five years later when Congress made distributions from the plans tax-free if used for qualified higher education expenses.
By the end of last year, more than $225 billion had been saved in about 11 million participant accounts, according to Strategic Insight, a mutual fund research company.
Still, most parents of children under 18 (56 percent) said in a Sallie Mae poll in 2014 that they hadn't heard of 529 college savings plans.
Lack Of Awareness
The plans try to get the word out through television commercials, social media campaigns and outreach to schools.
In Virginia, where TV ads feature a fuzzy green "tuition monster," 529 awareness is up to 69 percent of families with children under 18, said Mary Morris, chief executive of Virginia529, the nation's largest college savings plan.