By Jack Rayburn, policy analyst
Minnesota Office of Higher Education

Are you interested in helping your grandchild, niece, nephew or someone else save for college? If so, now is the time. Why? On Aug. 17, 2006, President Bush signed the Pension Protection Act of 2006. As a result, qualified withdrawals from college savings plans are now free from federal income tax. Previously, federal tax-free benefits for withdrawals from college savings plans were set to expire on Dec. 31, 2010. With the new legislation you can now invest in college savings plans, such as the Minnesota College Savings Plan, knowing qualified withdrawals to pay for college will be free from federal income tax.

Last year, Kiplinger's Personal Finance magazine recognized the Minnesota College Savings Plan for its low expenses, simple investment choices and "solidly above average performance." While past performance is not an indicator of future returns, popular plan features include:

• Tax-deferred growth opportunities - Contributions to an account have the opportunity to grow free from federal and Minnesota income taxes.
• Tax-free withdrawals - Withdrawals for qualified higher education expenses are free from both federal and Minnesota income taxes.
• Flexibility - You can use funds at thousands of eligible higher education institutions throughout the United States and worldwide.
• Low expenses - The annual fee for the Minnesota College Savings Plan is 0.65 percent of the amount in your account and does not apply to funds invested in the Plan's Guaranteed Option.
• Low minimum investment - You can open an account with as little as $25 and the maximum account balance in $235,000.
• Estate and gift tax benefits - If you are interested in gift and estate tax planning, you may also find the Plan attractive and you should discuss your individual financial circumstances with your tax or financial planner.

Nothing can enrich your loved one's future more than the benefits of higher education. By opening an account you are opening the door to a brighter future.  To find out if the Minnesota College Savings Plan is right for you, visit www.mnsaves.org or request an enrollment kit by calling 1 877 EDU 4 MIN.