This account can help you slash your tuition bill — and few Americans know it

Personal Finance

Despite the fresh horror of the rising cost of college, few people seem to understand the tax-advantaged account that will help you pay for it.

A recent survey from Edward Jones found that only about 30 percent of American adults were able to correctly identify a 529 plan as “an educational savings plan.”

The St. Louis-based brokerage firm polled 1,004 adults via phone in April.

Other answers included “a retirement savings plan,” at 17 percent and “I don’t know,” which was chosen by 34 percent of participants.

Just to be clear, a 529 plan permits families to save money for qualified educational expenses and generally have it accumulate free of taxes.

Families can take tax-free withdrawals from the account to cover college costs, including tuition, fees, books, room and board.

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