Number: RL32155
Title: Tax-Favored Higher Education Savings Benefits and Their Relationship to Traditional Federal Student Aid
Authors: Linda Levine and Charmaine Mercer, Domestic Social Policy Division 
Abstract: This report examines three tax-favored savings incentives for higher education, namely, Coverdell Education Savings Accounts, Section 529 or Qualified Tuition Programs, and Education Savings Bonds. It omits discussion of some other forms of tax-advantaged savings that were created primarily for other purposes (e.g., Individual Retirement Accounts) and for which higher education is just one of many possible uses (e.g., Uniform Gift or Transfers to Minors Accounts). It then explains the interaction between the three postsecondary education tax benefits and the process of determining student eligibility for traditional federal financial aid, consisting of grants, loans, or work-study income.
Pages: 22
Date: January 18, 2008