A 529 college savings plan offers which primary advantage?

A Guaranteed admission

B Tax-free growth and tax-free withdrawals when funds are used for qualified education expenses

C Free tuition

D Only for public universities

✓ Correct Answer: Option B

529 plan: state-sponsored investment account. After-tax contributions grow tax-free; withdrawals tax-free for qualified expenses (tuition, room, board, books, computers). Many states offer tax deductions for contributions. Can transfer beneficiary. New: unused funds can roll to Roth IRA.

💡 Why is B) the correct answer?

The correct answer to the question "A 529 college savings plan offers which primary advantage?" is Option B: Tax-free growth and tax-free withdrawals when funds are used for qualified education expenses.

The other options — A) Guaranteed admission, C) Free tuition, D) Only for public universities — are incorrect for this College Advising question. As explained above: 529 plan: state-sponsored investment account. After-tax contributions grow tax-free; withdrawals tax-free for qualified expenses (tuition, room, board, books, computers). Many states offer tax deduct…

📚 About This College Advising Practice Question

This 2-level College Advising question from the Financial Aid & Scholarships topic is part of BrainForge Quiz's free exam preparation library. Each question includes the correct answer and a detailed explanation to help you understand the underlying concept, not just memorize the answer.

How to use this page: Read the question above, consider all four options (A through D), then check the highlighted correct answer and explanation. For active timed practice, start a free College Advising practice test or use flashcards for spaced repetition review.

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A 529 college savings plan offers which primary advantage?

✓ Correct Answer: Option B

📚 About This College Advising Practice Question

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