Brian,I would start by reading a recent link supplied by EdmundRoss, http://www.geocities.com/edmund_rossIt will not tell you which plan is right or wrong, but it will help to explain some of the differences in savings plans. Most of this information is also readily available on the Fool or previous posts to this board.The quick answer to your question is that both the 529 and an UTMA will be counted "against" you when qualifying for financial aid. Since most FA is in the form of loans, though, you are unlikely to need as much (if any) if you have been saving for nearly 18 years. I cannot answer the question about taxes on the 529, other than it does grow "tax-free" - withdrawals are probably treated as income, though (but I'm not sure on this).UTMA's on the other hand have a two-tier tax status. The first $700 of capital gains/income (need to check this number, may be $1500)are taxed at the child's rate with the balance at the parent's rate. If you invest in stocks or tax-efficient mutual funds, then will be able to reduce or eliminate any yearly capital gains.I can't say which is right for you, or even fully explain all the possible tax and FA implications. As for me, I have chosen UTMA's since I don't like the restrictions or lack of control in the 529 plans.Hope this helps,smoot
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