WHAT CAN I USE A 529 ACCOUNT FOR?
It’s About So Much More Than Tuition
With a 529 account with The Education Plan®, you can help a loved one soar into the future by helping them pay for future educational needs.
From K-12 tuition to apprenticeships to room and board, a 529 plan is about so much more than paying for college tuition. It’s about making sure you’re ready for ever-changing educational needs with a flexible investment tool. With a 529 plan, you don’t have to worry about whether they’ll attend college or a trade school, get a full ride to a four-year university or choose an apprenticeship. You can set them up for success today so they can soar into the future — whatever it holds.
What is a Qualified Expense?
One of the biggest benefits of a 529 plan is that the funds in it are not taxed at the federal level — as long as you use them for “qualified educational expenses.” So what are educational expenses? The great news is that 529 plans are incredibly flexible and the list of educational expenses is long.
Even if your loved one doesn’t go to a traditional four-year college, or gets a large scholarship, you will be able to use a 529 plan to cover other educational-related expenses with no penalty.
Here’s everything that’s covered.
- Tuition and fees at universities, colleges, community colleges and trade schools. As long as the institution is accredited, you can use your 529 funds to pay tuition at it. This even includes some international schools and online colleges.
- Room and board, as long as your student is enrolled at last half-time and working toward a degree. This includes meal plans, on-campus housing and off-campus housing (up to the amount you would pay to live on campus).
- Books and supplies, including textbooks, lab materials, safety equipment, even notebooks used for coursework.
- Computers and internet, including software required for coursework, speakers, and other technology-related items needed.
- K-12 tuition. A 529 plan can be used to pay for up to $10,000 per year in K-12 tuition.
- Student loans. You can use up to $10,000 per year per borrower to repay student loans.
- Apprenticeship Expenses. This includes fees, supplies, necessary tools, etc. In order to qualify, the program must be registered with the Secretary of Labor’s National Apprenticeships Act.
- Roth IRA Rollover. You can roll up to $35,000 from a 529 plan into a Roth IRA in the name of the beneficiary.
Learn More About Qualified Expenses
A Little Today Goes a Long Way
Saving just a small amount each month can help set your loved one up for future success. Research suggests that students with as little as $500 in a college savings account are three times more likely to enroll in college and four times more likely to graduate than students without savings. And with the power of compound interest, every dollar you contribute has the potential to go farther.*
