A closer look Tax-Smart Approaches to Funding Education

In Brief

• College costs have been rising for decades. Adjusted for inflation, in-state tuition and fees for public colleges, for instance, have more than tripled in the past 30 years, and similar trends can be seen for private colleges and even independent primary and secondary schools.
• Parents, grandparents, and others often want to provide education funding for children, grandchildren, or other young people in their lives. Given the significant costs of an education that could potentially extend from pre-K through college, what is the most tax-efficient way to provide financial assistance?
• In this A Closer Look, we explore the potential benefits and drawbacks of several popular approaches to education funding.