NU Online News Service, Aug. 30, 12:25 p.m. – Schoolhouse Capital L.L.C., Boston, and OppenheimerFunds Inc., New York, say they will introduce a “Section 529″ college savings product designed for the financial advisor channel later this year.

Schoolhouse Capital, a subsidiary of State Street Corp., will be the program manager and administrator and OppenheimerFunds Distributor Inc. will be the distributor. Both firms expect will provide investment funds for the product.

Schoolhouse Capital now sells a a 529 plan sponsored by the state of New Mexico directly to individuals through employer worksites and E*TRADE, a Web-based securities broker.

The 529 college savings plan program, based on Section 529 of the Internal Revenue Code, offers generous federal and state tax breaks on contributions and account earnings.

Starting in January 2002, qualified withdrawals from 529 plans will be free from federal tax.

But the rules governing the program are complicated, and many individuals need help from financial advisors to understand the program, according to Schoolhouse and Oppenheimer.