September is College Savings Month and a bill in front of Congress would give financial advisors more flexibility to help their clients who invest in college savings plans, known as 529 plans.

The current bill (HR 1351) would make permanent some changes that so far are only allowed this year. The most useful change for advisors is the ability to make more than one switch per year from one plan to another, or to change allocations within a plan.

Traditionally, only one such annual switch was allowed, says Joseph Hurley, founder of, a site dedicated to helping individuals and advisors better understand the challenges of paying for higher education. This year, two changes were allowed, and this bill is an attempt to make that a permanent change, he said.

Hurley said that advisors will view this as an aid mostly in terms of adding a level of flexibility in their service to clients.

But Hurley says that there is another to make a switch within a plan. “Something that most financial advisors don’t realize, is that you can always just change your beneficiary, and when you do that you can also make a switch in your [529] plan,” he says.

A parent can change the beneficiary of the plan from one child to another, and use the opportunity to make the desired allocation switches, he says. The money continues to grow tax deferred. And when the first child actually needs the money for college? No problem, just change beneficiaries again, Hurley says. There is no limit on that, he adds.

The college savings plans, known as 529 plans, for the section of the Internal Revenue Code that created them, were introduced in the late 1990s and allow money to grow in a tax-deferred basis provided it will be used for higher education.

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