College seems to be getting more expensive everyday. In a decade or two, the cost is going to be even higher. Setting up a college savings plan is one way parents can save towards funding their child's collegiate dreams. But, can someone other than the parents open up a college savings plan for the child?

The simple answer is yes. Anyone can set-up a savings plan for higher education and designate someone else as the plan's beneficiary.

The 529 College Savings Plan

A savings plan can take many forms. A simple savings account can be designated for that purpose, as can a trust fund. Most choose a formal 529 college savings plan instead, for the tax benefits it provides. A 529 plan is operated by a state or an educational institution, for the purpose of helping families (and others) set aside money for a child's future higher education needs. …show more content…
A prepaid college plan allows a parent (or other person) to prepay all or part of the in-state public college education. Most of these plans can convert to pay for out-of-state public or private colleges, though some do not.

A straight savings plan works more like a 401K or an IRA. The funds go in, they get invested, and they grow until the time they are needed. Those funds can be used to fund higher education costs in almost any higher education institution in the country.

The actual 529 plans can vary quite a bit from state to state, so if you want to open a 529 plan for someone you know, you need to find the plan that fits your needs and goals.

Setting Up the Fund

Once you decide which 529 savings plan you want to use, it is fairly simple to set up.

The actual account itself is set up in your name. Most accounts are limited to only one owner, so your spouse would need to open up a separate account in his or her