Which is still better than the savings accounts that the comment above was comparing them to, which are taxed federally and often locally.

And if one happens eventually come under the IRS Form 8815 MAGI cutoff, it has a federal income tax exclusion for education [1]. Consistent with what you say, it is exempt from state income taxes, which savings accounts typically aren't.

[1] https://treasurydirect.gov/indiv/planning/plan_education.htm

Negative interest rates on cash would solve this problem by getting rid of inflation.