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Document Number: 5491 When Saving Means Losing: Weighing the Benefits of College-savings Plans - In recent years college-savings plans, or "529 plans," have become a popular tool used by students and families to combat the rising costs of a college education. This report analyzes the effects of college-savings plans on four family income levels and concludes that these plans may actually decrease the affordability of a postsecondary education. Low-income students, in particular, can see a reduction in the amount of need-based aid they receive if they choose to invest in a college-savings plan. The authors argue there needs to be better alignment of the outcomes of college-savings plans with the intentions of those who created and support them. (Roberto M. Ifill and Michael S. McPherson, The Lumina Foundation, July 2004)
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Related Issues Postsecondary Affordability
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