Andrew Shilling at MarketWatch wrote about seven college savings strategies beyond the 529, for parents worried about overcommitting to an account with education-only strings attached. In-state public tuition now averages $11,950 a year, out-of-state $31,880 and private nonprofit $45,000, so the money has to come from somewhere.
My contribution was a tool almost nobody uses for this. I-bonds have been underused for education savings. They are inflation-protected, and the interest is excludable from federal income if used for qualified education expenses, subject to income limits in the year of redemption. For a family that wants a safe, government-backed piece of the college fund that keeps pace with tuition inflation, that is a rare combination.
The rest of the list is worth reading: Roth IRAs, where contributions can be withdrawn without tax or penalty and the account keeps its retirement purpose if the child gets a scholarship; a taxable brokerage account for flexibility; and merit aid, which is the strategy families forget to plan for.
My framework is to build the college fund in layers. The 529 for the money you are confident will go to school. I-bonds and Roth contributions for the money that might. A taxable account for the rest. The flexibility is real, and for a family with an uncertain 15-year horizon, flexibility is worth a little tax efficiency.
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