Beyond college tuition: 7 ways to use a 529 savings plan

Beyond college tuition: 7 ways to use a 529 savings plan

Over the past two decades, 529 college savings plans have emerged as the leading vehicle for funding education. Many families, however, may not understand what a 529 plan does — or can do. The rules for 529 plans have evolved over time and expanded to include provisions beyond college tuition.

Here are 7 qualified expenses that may be funded with a 529 education savings plan:

  1. Computer equipment, software, and related technology

    Technology includes printers and internet services. The computer must be used by the 529 plan beneficiary during the period when they are enrolled in a college or university. Prior to a provision change in 2015, students had to prove that owning a computer was required by the school.

  2. Off-campus housing

    Families need to find out how the college is defining room and board and what rules have been established. In general, if students are living off campus, their rent, food, and utilities expenses can be considered qualified expenses for a 529. There is a stipulation, however, that these expenses can’t exceed the college or university’s published allowance for room and board, even if the off-campus expenses are higher. Students living off campus should keep records and receipts to validate the expense. According to, for room and board expenses to be qualified, the student has to be enrolled in an eligible college program on at least a half-time basis. The expenses can include both on- and off-campus costs. In order to be qualified expenses, the costs have to be incurred by the student when they were enrolled or accepted for enrollment.

  3. Living at home

    Families may also be able to use 529 assets for room and board for students living at home. But the cost allowable must be lower than the cost of living on campus. Some colleges may specify a cost for “commuters” or “at home.” Still, the student living at home would only be able to use the 529 savings for the lesser amount.

  4. Study abroad

    Students enrolled in a study abroad program may use 529 plan funds to pay for qualified expenses if the program is approved for credit by the student’s home college or university.

  5. Repay student loans

    The 529 plan allows for the payment of principal or interest on the designated beneficiary’s student loan or their sibling’s student loan. The total amount of distributions for loan repayment is limited to $10,000 lifetime per individual. Interest paid with these funds doesn’t qualify for the student loan interest deduction.

  6. Elementary and secondary education

    Funds from a 529 plan can be used for K–12 tuition expenses (up to $10,000 per student, per year). This includes public, private, and parochial schools.

  7. Vocational and trade education

    The 529 plan funds may be used for tuition and qualified expenses for vocational and trade education, as well as qualified apprenticeship programs registered with the U.S. Department of Labor.

Sources:, Internal Revenue Service.

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