Section 529 (Qualified Tuition) Plans Public Law 107-16 (see Section 402)

529 plans differ from state to state but fall into two general categories, pre-paid tuition and general savings. The pre-paid tuition plans offer financial incentives for students to attend college at certain state schools while the savings plan makes no such distinctions. Some states encourage low-income families to open 529 accounts by waiving the application fee, allowing small minimum deposits, ensuring low management costs, and providing matching funds.