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savings program for education

state 529 plans
savings programs established and administered by States for the purpose of setting aside savings for "qualified higher education expenses".

Family member setup and make contributions to a fund with a States that sponsors 529 College Prepaid Tuition and/or Savings Plans.
see this 529 center for state-by-state information

IRA withdrawals
you can make withdrawals from your IRAs for qualified higher education expenses without having to pay the 10% additional tax.

You will owe income tax on at least part of the amount withdrawn.
more information from IRS web site

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