Myth 5: I should stash every bit of college savings in a 529 plan. Parents shouldn't put every dime they think their children will need for college in a 529 plan, says Sarenski. A student could drop out after two years, or may earn a scholarship.
Parents should put some money for college in other investments for flexibility of use, he says. Plus, they can use the money for college expenses, such as transportation, that can't be withdrawn from a 529 plan without incurring a tax penalty.
Trying to save for college? Get tips and more in the U.S. News College Savings 101 center.