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In this article the authors analyze saving with 529 plans and several other options, in light of the 2001 tax law changes. The authors also discuss the impact of saving on financial aid eligibility. In addition, they use a Monte Carlo approach to simulate asset accumulations in a 529 plan, mutual funds and the recently renamed Coverdell Education Savings Account. Rather than assuming fixed rates of return into the future, their Monte Carlo approach allows for random asset returns in simulating possible future outcomes.
