Americans amassed $464 billion in tax-advantaged college savings investment plans as of June, up $91 billion from a year ago, according to new data from the Federal Reserve.
Spread among the estimated 15 million families with so-called 529 accounts, that means that the average plan holds less than $29,000, which would pay for about half of a year of tuition at the average private university or a year or more at a public university.
529 plans allow people to invest money and then withdraw it to pay for college and some other educational expenses without paying federal income taxes on the gains.
About 15 million families put money into 529 savings plans, up from about 10 million in 2011, according to the College Savings Plans Network in Lexington, Kentucky.
The rules for using the money differ by state, and some allow withdrawals to pay for tuition expenses in connection with elementary or secondary public, private or religious schools from kindergarten through grade 12. The 529 plans can sometimes cover items such as rent or equipment, including computers, printers, laptops and even internet connections.
Many states boost the value of these plans by offering state-level tax benefits.
