IRAs for College Education: Beware of Imitations

Publication Date: November 1987

Publisher: Heritage Foundation (Washington, D.C.)

Author(s): Peter J. Ferrara

Research Area: Education

Keywords: Education

Type: Report

Abstract:

Genuine Education IRAs are a far superior method of enabling parents to finance college fees. They allow parents to retain control over their own funds and to choose the highest yielding investment alternatives. They give parents and students the freedom to choose the education institution at which to spend the funds. While the tuition prepayment plans are likely to fuel even more rapid college cost increases, the Education IRAs provide new incentives to counter increases. While the tuition prepayment plans face the prospect of being transformed into taxpayer subsidies for higher-income families, the Education IRAs would be free from such political pressures.