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Isn't that the definition of the Coverdell?

It is and somehow it doesn't seem right to have different limits on Coverdell contributions vs 529 contributions.

My personal theory is that the mutual fund/investment company lobbyists had more clout and got the increased limits for the 529 :)

Another theory(not mine) is that because Coverdells can be use pre-college,they somehow smack of vouchers so they will never have the limits increased.

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