529 College Savings Plan Qualified Expenses: How You Can Use 529 Money
Families use many different financial instruments to save for college. From the time the child is born, or in some cases even before, parents, grandparents, and other family members put money aside to help pay for the future cost of college. One of the most popular strategies is to use a 529 College Savings Plan. Let’s take a look at 529 college savings plans, what they are, how you can spend them, and qualified expenses.
529 College Savings Plan
Check out our free FAFSA Guide >>
What is a 529 College Savings Plan?
A 529 plan is a type of savings plan designed to encourage families to save for future higher education expenses. Named after Section 529 of the Internal Revenue Code, these plans are run by states or educational institutions, and are specifically created to help families set aside funds for college. The funds in a 529 plan grow tax-free, and withdrawals for qualified educational expenses are also tax-free.
How Can A 529 Plan Be Used?
One of the benefits of a 529 plan is that the funds in the account can be used for a variety of qualified higher education expenses, including tuition, fees, room and board, books, and supplies. Additionally, the account owner maintains control over the funds, regardless of the student's age, and can change the beneficiary to another family member if necessary.
529 College Savings Plan Qualified Expenses
Here are a few examples of qualified expenses for 529 College Savings Plans:
Tuition and fees
Books and supplies
Computers, software and internet access
Room and board
529 College Savings Plan Summary
Overall, a 529 plan is a flexible and tax-advantaged way for families to save for the cost of higher education. By starting early and contributing regularly, families can help ensure that their children have the financial resources they need to pursue their educational goals.
Check out our free CSS Profile Guide >>
There is a lot to be gained from our free general financial aid advice, but it’s also a very individual process. If you have remaining financial aid questions, email us to discuss more or book an individual session.