One of the big issues that many of our clients are concerned with is how will I be able to pay for my children's college educations?

Congress recently introduced a new type of program to help families save for the high cost of paying for college. These new plans are called Qualified State Tuition Programs.

A parent, grandparent or even a friend can establish one of these accounts for a child. There are no income limitations on who can invest the money, unlike the Education IRA, which has an income cap.

The first advantage to this new type of tuition savings program is that the earnings are tax-sheltered until the money is withdrawn for college expenses. When withdrawals are made, the earnings are then taxed at the child's rate, not the contributor's. Generally the student will be in a lower tax bracket than her parents' or grandparents'.

The money can be used for expenses, including room and board, at any accredited college in the United States. Many of the earlier savings plans permitted tuition payments only and not room and board.

If the child does not go to college, or if you take out the money for any reason other than college expenses, there will be income taxes and perhaps a penalty to pay. But the account may be transferred from one child to a sibling if the first child chooses to forego college. Some earlier tuition savings programs were not transferable from one child to another.

The second big advantage to putting money into this program is that if you are a New York State resident your contribution (up to $5,000 for an individual and $10,000 for a couple) can be deducted from your income when computing your New York State Income Tax for the year in which the contribution is made.

In New York the program is being managed by TIAA-CREF, a highly regarded mutual fund company. TIAA has indicated that it will keep its management fees low.

Like many savings and investing strategies, the important thing is to get started.