A college graduate is likely to earn $570,000 more than a high school graduate over a lifetime, according to the annual 529 Report by College Savings Plans Network, and students who have a college savings account in their name are six times more likely to get a higher education than those who do not.
A 529 college savings plan is a tax-advantaged investment plan for saving for future higher-education expenses, typically for a child or grandchild. The plans are administered by individual states.
CSPN reports that in 2011, "despite the economy and media reports that college may not be worth the investment," Americans used funds from 1.4 million 529 accounts to pay for college expenses, and investment in 529 plans reached a record high of $164.9 billion.
How do 529 plans stack up against other options, like Roth IRAs and Coverdell ESAs? For more see Tax-wise ways to save for college. Our recent report on student debt has several sections on how to dig out from under that debt, including how to avoid borrowing.