savings vehicle. In theory, an ESA sounds like a great place to park some college savings. You can make nondeductible contributions of up to $2,000 per
child per year, and investment earnings and account withdrawals are free of
tax as long as you use the funds to pay for elementary and secondary school
or college costs. However, funding an ESA can undermine your child’s ability
to qualify for financial aid. It’s best to keep the parents as the owners of such
an account for financial aid purposes, but be forewarned that some schools
may treat money in an ESA as a student’s asset.
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