Inyteresting article in today’s Wall Street Journal: A New Lease on Life for 529 Plans; Extension of Popular Tax Breaks on College Savings Program May Revive Investor Interest, by Anne Marie Chaker:

Investors in 529 college-savings plans received some good news with Congress’s decision to make some of their most-attractive features permanent. The changes were included in sweeping pension legislation last week that affects many types of popular retirement accounts, from traditional employer-sponsored pension plans to 401(k) plans. President Bush is expected to sign it into law soon.

The pension bill affects a wide range of 529-plan features that were scheduled to "sunset," or expire, at the end of 2010. In addition to preserving tax-free account withdrawals — the most important issue facing many families — it allows investors to continue to roll over their 529s to a different state plan once a year without requiring a change in beneficiary. The legislation also extends the option to invest in both a 529 plan and a separate Coverdell Education Savings Account for the same beneficiary in the same year. State officials, as well as the fund companies that run 529 plans, hope the permanency of the enhancements will help reignite 529 investments, which had been showing signs of tapering off.