The state-sponsored college-saving plans known as Section 529 have exploded in popularity as parents and grandparents have shopped for better ways to invest for college.

The 2002 tax changes make them even more compelling:

• You may withdraw the money tax-free when it’s time to pay college bills. Originally, your investments grew only on a tax-deferred basis.
• You may claim the Hope or Lifetime Learning credit in the same year that you tap money from a 529 plan. Warning: You can’t double-dip by using a 529-plan withdrawal and a tax credit to pay for the same college expense.
• It’s easier to transfer money from one 529 plan to another on behalf of the same student. Previously, such transfers were considered taxable distributions.

For more information click on www.savingforcollege.com.