Education Funding

Develop an Education Funding Plan for Your Child

The younger your child is, the more difficult it can be to fully understand the need to develop an education funding plan. But with education expenses often starting as early as elementary school, it's clear that the sooner you start saving, the better. Even if you feel like you've already fallen behind, it's not too late -- what you do today can have a great impact on your child's education.

Get a Head Start on Education Funding to Tackle Rising College Costs

For the 2007-08 academic year, average college tuition and fees per year were $6,185 for public universities and $23,712 for private -- up 6.6% from just last year.*

Too often, these rising college costs stand between your children and their dreams for the future. Even if they excel in school, your children still might not be able to attend the college of their choice. The lack of an education funding plan often forces parents and students to make a difficult choice -- take on the burden of student loan debt or avoid college altogether.

Choose an Education Funding Plan That's Right for You

The chart below compares some of the most widely used education funding alternatives. A Wachovia Securities Financial Advisor can help you decide which ones work for your unique situation.

Compare Your Education Funding Alternatives

Features	529 College Savings Plans¹	Coverdell Education Savings Account²	Custodial Accounts (UGMA/UTMA)³	Parent-Owned Taxable Brokerage Accounts
Income limitations for participation	None	Single filers: $95,000- $110,000; joint filers: $190,000-$220,000	None	None
Control of the account	Account owner	Custodian controls until beneficiary turns 30	Custodian controls until age of termination	Account owner
Annual contribution limits	$12,000 per beneficiary ($24,000 for a married couple)	$2,000 per designated beneficiary younger than 18	$12,000 ($24,000 for couple) without being subject to federal gift tax treatment	None
Current taxation of earnings	None		If child is younger than 19, or a full-time student under age 24 in 2008, the "kiddie tax" applies	Taxed at the owner's rate
Qualified distributions are federal-tax-free	Yes	Yes	N/A	N/A
May have state tax benefits	Yes	Yes	No	No
Taxation/penalty for withdrawals for nonqualified expenses	Earnings portion of nonqualified withdrawals is taxed as ordinary income to the plan participant and is subject to a federally mandated 10% penalty (earnings only). Penalty-free withdrawals are permitted in the event of scholarship or death or disability of the beneficiary.		N/A	N/A
Investment alternatives	A choice of portfolios managed by professional fund managers	Owner chooses investments
Can be used for college expenses	Yes	Yes	Yes	Yes
Can be used for primary and secondary school expenses	No	Yes	Yes	Yes
Can change beneficiaries	Yes	Yes	No	N/A

Learn More About Your Education Funding Alternatives

For more information about education funding, contact a Wachovia Securities Financial Advisor. You can also learn more about:

¹College savings plans offered by each state differ significantly in features and benefits. The optimal plan for you depends on your specific objectives and circumstances. In comparing plans, please consider each plan's investment options, fees and state tax implications. As with all tax-related decisions, consult with your tax advisor.

²Qualified Coverdell Education Savings Account distributions are not subject to state and local taxation in most states.

³Earnings on custodial accounts may be subject to the "kiddie tax" if the child is younger than 14 years old. Generally, earnings on the account are taxable at the parent's highest marginal rate.

Wachovia Securities does not provide tax or legal advice. Be sure to consult with your own tax and legal advisors before taking any action that may have tax consequences.

A Wachovia Securities Financial Advisor can help you determine which financial services program is appropriate for you.

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