As the crop of new toys and games hit the stores this holiday season, remember that there is one gift idea that never goes out of style or loses its long-term appeal: helping someone attain high education.

While it may not offer the short-term thrill of the latest video game, it does offer some undeniable benefits down the road. The cost of a college education increases every year. For children who hope to gain a college degree, starting a savings program now makes financial sense. According to the U.S. Department of Education, a child born today can expect to pay approximately $287,000 to attend a private college and $122,000 to receive a degree from a public university.

Many financial advisors agree that one of the better ways to save for college expenses is through a “529 plan.” Introduced in 1996, 529 plans are college savings plans that enable anyone to open an account and invest significant amounts for education expenses (contribution limits vary from state to state). Withdrawals later made from a 529 account for qualified higher educations expenses are federal income tax-free. (See * note at end of column.)

Even more compelling this time of year is another benefit: Annual gift-tax laws allow individuals to put up to $11,000 into a 529 plan annually, or $55,000 once every five years, tax-free. Under current laws, a couple filing taxes jointly could put as much as $110,000 into the 529 account of a child, grandchild, niece or nephew tax-free. Also, subject to certain limitations, contributions to a 529 plan are generally excluded from the contributor’s taxable estate for federal estate tax purposes, providing the contributor is not the beneficiary on the account. (See second ** note at end of column.)

Holiday shopping will always bring a fair amount of stress. It helps to remember that education is a gift that has long-term value and can offer rewards for a lifetime. If you’re planning to help a loved one reach post-secondary education, the time to start is now.

*The federal income tax-free of qualified 529 plan withdrawals is scheduled to expire after Dec. 31, 2010, unless extended by Congress. State and local taxes may apply.

**If this choice is made, gifts made by the contributor to the beneficiary during the five-year period may not exceed $55,000, without federal gift consequences. If the contributor dies before the five-year period expires, the portion of the gift allocable to the years remaining would be included in the contributor’s estate for estate tax purposes. Consult an attorney or tax advisor for more information.