Hello help2decide,
529 plans generally have more expensive fee structures than some other saving mechanisms, but those disadvantages are usually offset by tax gains-- especially when money is invested over a long time period. If you're looking to invest a few thousand for the short-term (i.e., 2 years), then you should investigate what tax advantages (if any) your state offers. Each state is different, and I couldn't tell on your profile where you are from. Savingforcollege.com is a good source for information, by the way. So, if your state offers special tax advantages for residents, you could consider that. If not, and this (along with the rest of the message) is purely non-expert and non-professional advice-- consider investing in Utah's plan-- it's the cheapest. I think that you would expect expenses to be about 50 basis points (or 0.5%).
One other thing to consider-- does it make sense to invest in a Roth IRA instead of a 529 plan? I don't know a lot about them, so I won't even try to advise you.
One thing you may want to do is call up a school (even a school that you're not planning to apply to, if you're worried about them having too much financial info on you) and ask them how they treat different assets. The financial aid officer may have some suggestions for you, since presumably they deal with this every day. There may also be some differences in how they treat assets-- so one way of saving (such as using a Roth IRA instead of a 529 plan) may leave you eligible for more aid. (Or, all could be equal-- in that case, definitely go with whatever makes you pay lower fees.) I'm no expert, so I'd ask someone who is. Sorry I can't be more helpful, but best of luck with financing your education.
- Kate, a non-Utah resident
