A closer look at 529 plans

You don't have to invest in your state 529 plan. If there isn't a tax advantage to using your state plan, you might want to consider using another state's plan, especially if it offers better investment options with lower costs.

Another factor to consider is the ownership of the 529 plan. If a student's parent owns the plan, only 6 percent of the value will count toward the EFC, which isn't bad. But if a grandparent owns the fund, none of it will count toward the EFC.