Coverdell Education Savings Account
Although a Coverdell Account is not as popular a vehicle for college savings, it can be beneficial for people who have kids attending private secondary schools.
Unlike standard 529 plans, funds from this type of account can be used to cover education expenses in elementary school, high school, or college. It also expands the types of expenses that qualify to include items such as uniforms, books or tuition. Unlike the 529, the CESA has a maximum contribution limit of $2,000 per year per child, the balance in the account must be dispersed or transferred to another family member by the time the recipient is 30 years old and there are some income limitations. Fortunately, like the 529, the funds are not considered to be the beneficiary’s money, which means that they will not affect his or her eligibility for financial aid.