The White House retreat this week on eliminating the tax exemption for withdrawals from 529 savings plans is good news for families putting away money for college as its elimination would have ended this great tax break used since 1996 to help families save for college.

The 529 plan (named after Section 529 of the Internal Revenue Code) is a college savings plan sponsored by the state, where earnings grow while remaining federal income tax deferred and sometimes even eligible for state tax deductions. Distributions for qualified higher education expenses are federal income tax free. Savings can be used for tuition, books, and other education-related expenses at most accredited two- and four-year colleges and universities, U.S. vocational-technical schools, and eligible foreign institutions.