November 12, 2004

Savings Plans Favor the Rich, Study Finds

By JOSEPH GIDJUNIS

Rich families benefit more than poor families from the college-savings plans that have become increasingly popular in recent years, a study from Harvard University's John F. Kennedy School of Government has found.

The savings programs, which are known as 529 and Coverdell plans based on the provisions of the federal tax code under which they were established, enable families to set aside and invest money, either tax-free or with tax-free earnings, that can later be used to pay tuition

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