Weigh Coverdell Accounts, IRAs for College Savings Flexibility

The investments in Coverdell and IRA accounts can be changed more frequently than in 529 plans.

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While 529 plan rules limit families to using funds only for higher education – or else face a tax penalty – using money saved in an IRA could eat into a parent's retirement fund, so student loans are often a better solution for families.

"Parents should be careful to not overextend themselves," says student loan expert Heather Jarvis. "Federal student loans are a safe way to borrow for student expenses as long as families only borrow what they need and can afford to repay."

Trying to fund your education? Get tips and more in the U.S. News Paying for College center.