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529 Plan Qualified Expenses: What You Can Spend On Now

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Higher education has many options today. For example, numerous online classes let more students live at home or off-campus. But keeping up with what to know can be challenging. Here you can get pointers on college costs and 529 allowable expenses.

A Bit About the Cost of College

The cost of college can feel like sticker shock. For the 2022-23 school year, the average published tuition and fees for full-time students were*:

  • Public two-year in-district: $3,860

  • Public four-year in-state: $10,950

  • Public four-year out-of-state: $28,240

  • Private nonprofit four-year: $39,400

Determining how to plan and help pay for college expenses can feel overwhelming. But it’s crucial. It helps to start early, but the key is just doing it, even if college is coming sooner rather than later.

Some choose to fund higher education by taking out student loans. However, as tuition increases, student loan balances are increasing too. The amount of debt graduates amass can significantly affect how soon they may be able to pursue bigger financial goals—like, buying a place to live or a car, starting an emergency fund or investing, putting aside money for retirement and much more.

Figure Out Your Goal

Determine how much you need to save with our college savings calculator.

Before your student starts college, talking to them about money is smart. From basic financial lessons to a deeper dive into debt. Or, maybe they would like to know more about investing and how it works.

529 Plan Qualified Education Expenses

529 plans cover more than just tuition. Qualified education expenses include tuition, mandatory fees, computers, books, supplies, and room and board (must be enrolled half-time or more).

Off-campus housing also counts as a qualified expense. You can use your 529 plan to cover rent, utilities and grocery bills up to the college’s allowance for room and board, which you’ll find posted on their website or by calling the financial aid office.

Does Your Mortgage Count as Housing?

No. If your student is living at home, be aware you cannot use a 529 withdrawal to pay toward your mortgage. But you can use 529 funds to cover your student’s groceries up to the allowed meal amount posted by the college.

For a 12-month apartment lease, remember that the summer months won’t count as a qualified expense if your student isn’t enrolled at least half-time. In this case, make sure you use 529 funds only for rent during the months your student is enrolled.

SECURE Act Expansions and Other Ways to Spend 529s

If you’re spending less because your student is living at home or was awarded a substantial scholarship, you can use your 529 funds in other ways. For example, suppose your student earned a scholarship. You may take a penalty-free distribution equal to the scholarship amount out of the 529 (but you may have to pay income tax for any amount designated for room and board)**.

Additionally, the 2019 SECURE Act allows families to pay off up to $10,000 of their student’s qualified student loans with 529 money and up to $10,000 of a sibling’s student debt from the same 529 plan without changing beneficiaries.1 That’s one way not to get stuck with leftover 529 money.

529s Are for More than University Learning

529s can pay for eligible apprenticeship programs (new with the SECURE ACT), vocational programs, community college, graduate programs, and up to $10,000 in private K-12 tuition in states that consider K-12 private education a qualified expense. Check if yours does.

Whether your child is two or 12, it’s never too soon to consider saving for their post-high school plans. Try to keep as many doors open as possible for maximum flexibility. The sooner you start, the better.

Paying for big-ticket expenses like college takes planning.

Let us help. Talk to a college savings specialist.


Trends in College Pricing 2022, The College Board, October 2022.


Internal Revenue Service, Publication 970, Tax Benefits for Education for 2022 Returns.


New Law Allows 529 Plans to Repay Student Loans,, Dec. 19, 2019,

This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.

You could lose money by investing in a mutual fund, even if through your employer's plan or an IRA. An investment in a mutual fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.