The state-sponsored college-savings accounts known as 529 plans doubled in size last year, and now hold $26 billion in assets. No wonder the programs are popular--over the past decade, tuition has risen 38%, and cash-strapped parents are looking for ways to save. Public colleges saw a 10% jump in tuition last year alone.
The 529s are generally a good deal, letting investment earnings grow and be spent, free of federal tax, for undergraduate or graduate tuition, room and board or books and supplies. But with so much money flowing into 529s, the market has been flooded with more than 80 programs....
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