College and university tuition – Whether your child attends a public or private university or community college, funds in a 529 account can be used toward tuition as long as the school is eligible for federal student aid. The same is also true for graduate school and some schools abroad.

College alternatives – More Americans have been moving away from more traditional college programs in favor of trade programs, which are often cheaper, offer focused training, and typically take less than two years. 529 accounts can now be used for trade and vocational schools, apprenticeship programs,¹ and approved nondegree programs and recognized postsecondary career credentials.²

Living on or off campus – As long as your child is enrolled in a degree or certificate-seeking program at least half time, room and board on campus is considered a qualified expense. For those living off campus, the cost of rent and utilities up to the school’s allotment is considered qualified, but any amount above the allowance could be subject to taxes.

Groceries – If your child is living off campus, food expenses up to the cost of an on-campus dining plan can be covered by 529 funds, but the tax advantage only applies to necessities—not dining out or entertainment costs. It’s best to confirm acceptable amounts with your child’s school each year.

Academic fees – Students may need to pay fees in addition to tuition, such as technology or lab fees, and can use their 529 plan funds toward them. Activity fees for sports or organizations, however, aren’t eligible.

Computers, software, and internet access – Tech essentials and specialized software required to complete coursework (i.e., any design programs necessary for a graphic-design degree) are considered qualified expenses. Internet access is also a covered expense for students who live off campus.

Books and supplies – In addition to textbooks and class-specific materials, school and office supplies, such as notebooks, pens, pencils, are covered by 529 funds. 

K–12 schooling – Up to $20,000 can be used for private or religious K–12 tuition per student, per year. In addition, 529 funds may cover other eligible expenses such as curriculum materials, books, tutoring, standardized test fees, dual-enrollment courses, and certain educational therapies for students with disabilities.² Check your state’s guidelines to confirm what qualifies.

Student-loan repayment – Funds can be used for qualifying student-loan repayments, which can include both private and federal student loans. When using 529 funds to pay off student debt, there’s a lifetime limit of $10,000.

Roth IRA conversion – Account owners and beneficiaries can now roll over funds into a beneficiary-owned Roth IRA. In order to do so, the 529 account must have been opened for at least 15 years, and the amount rolled over must have been in the account for at least last five years. Rollovers have a lifetime limit of up to $35,000, but they’re also subject to annual IRA contribution limits.