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Clarification on 529 fund
You are faced with a dilemma. If you use a 529 plan to fund your education, the short timeline of a few years will limit your returns that are tax free. Most people who use a 529 plan either purchase years of tuition via lump sum, when the child is young; or they  put aside money on a regular basis that will grow tax deferred/tax free. Some states do give a tax break when the contribution is made by a state taxpayer into a plan run by the state. The long term plans generally use a risk profile that starts off heavily weighted in stock when the child is young, and becomes more fixed income as the child reaches their high school years. The idea is to protect the fund from big losses when there is no time to recover. If you choose the plan with the least risk the issue is that the amount of gains that are being protected from federal tax is small. If you pick a more aggressive plan the risk is that the losses could be larger than the state tax savings. Look at some of the other tax breaks for tuition to see if you qualify Credits An education credit helps with the cost of higher education by   reducing the amount of tax owed on your tax return. If the credit   reduces your tax to less than zero, you may get a refund. There are   two education credits available: the American Opportunity Tax Credit   and the Lifetime Learning Credit. Who Can Claim an Education Credit? There are additional rules for each credit, but you must meet all   three of the following for either credit: If you’re eligible to claim the lifetime learning credit and are also   eligible to claim the American opportunity credit for the same student   in the same year, you can choose to claim either credit, but not both.   You can't claim the AOTC if you were a nonresident alien for any part   of the tax year unless you elect to be treated as a resident alien for   federal tax purposes. For more information about AOTC and foreign   students, visit American Opportunity Tax Credit - Information for   Foreign Students. Deductions Tuition and Fees Deduction You may be able to deduct qualified education expenses paid during the   year for yourself, your spouse or your dependent. You cannot claim   this deduction if your filing status is married filing separately or   if another person can claim an exemption for you as a dependent on his   or her tax return. The qualified expenses must be for higher   education. The tuition and fees deduction can reduce the amount of your income   subject to tax by up to $4,000. This deduction, reported on Form 8917,   Tuition and Fees Deduction, is taken as an adjustment to income. This   means you can claim this deduction even if you do not itemize   deductions on Schedule A (Form 1040). This deduction may be beneficial   to you if, for example, you cannot take the lifetime learning credit   because your income is too high. You may be able to take one of the education credits for your   education expenses instead of a tuition and fees deduction. You can   choose the one that will give you the lower tax.