(MONEY Magazine) – Parents resolving to save for their kids' college education will get even more help from state governments this year. State-sponsored college savings programs known as 529 plans, which let your investments grow tax deferred until you withdraw the money for college, continue to proliferate and improve. Here's how.

More coverage. Thirty-three states now offer a 529 savings plan, up from only 23 a year ago, and nine more plan to introduce their own this year. For a list, go to www.collegesavings.org. In 27 states, 529 plans are open to out-of-state residents. One caveat: Before you invest out of state, weigh whether you're passing up valuable in-state tax benefits.

More investment options. Many states are letting investors select their own mix of stocks and bonds instead of limiting them to one age-based allocation, notes C.P.A. and 529 expert Joseph Hurley. In November, New York gave investors in its 529 plan three more choices--a fixed-income fund with a guaranteed 3% return, a more stock-heavy age-based portfolio and an aggressive equity fund. You can't, however, transfer existing funds.

More players. In December, Charles Schwab took its first leap into the 529 pool. The brokerage is marketing the nationally available Kansas savings plan, managed by American Century. With the upcoming May revamp of the Alaska 529 plan, which will also be available to residents of all 50 states, T. Rowe Price will have its first nationally available 529 savings plan.

--STEPHANIE D. SMITH