EdVest, Wisconsin's college savings program, has really grown in popularity. In May, 2001, only 2,200 people were participating. That number recently grew to 90,000.

EdVest is an investment program designed to help parents save for their children's college education. It is sometimes referred to as a Section 529 Plan and is administered by Strong Capital Management in Milwaukee on behalf of the State of Wisconsin.

Last summer, Congress changed the rules for these types of college tuition programs. All earnings will be tax free if used to pay college expenses. More investment options were also made available at that time. Both of these changes have really caught people's attention and encouraged parents to participate. The $3,000 state income tax deduction each year also helps.

It is my recommendation that parents who want to save for college should use one of these Section 529 Plans. It is the best way to save for your children's college education. Other states also offer their own version of Section 529. Most of these states are available for Wisconsin residents to use. A recent report rated Wisconsin's EdVest program very highly, although the 1% annual fee tends to be higher than most other states. Shopping around can find you plans in other states that may offer different investment options and lower fees, but you will give up the $3,000 Wisconsin income tax deduction.

Some clients ask what happens to the money if their children decide not to go to college. In my opinion, that is one of the good things about EdVest. The money is easily transferable to nieces, nephews or grandchildren with no negative tax consequences. If all else fails, parents are allowed to withdraw the money and pay regular tax on the earnings.

I like EdVest. I like the $3,000 deduction. I like the tax-free earnings. The definition of "college expenses" is quite broad and includes just about everything. If you want to save even small amounts for your children's college education, EdVest is a nice way to do it.

As always, feel free to call me or send me an email if you have specific questions.