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4 Ways to Use a 529 Account

One of the common misconceptions about 529 plans is that they are designed solely for four-year schools or for those seeking a degree. 529 plans are designed to be flexible, and in recent years the approved uses for your 529 plan have grown to include even more pathways to help individuals and families achieve their dreams.

Here are the four main ways to use college savings plans.

  1. Higher Education (tuition, fees, meals, room and board, textbooks, supplies and more)
    The most well-known way to use a 529 plan is to cover expenses at colleges, universities, vocational schools or any postsecondary institution that is eligible to participate in federal student aid programs administered by the U.S. Department of Education. The list of "eligible educational institutions" is broad, spanning elite private colleges, state flagship universities, local community colleges, theological seminaries, trade schools offering culinary or beauty skills training, and international schools. Related: What is a qualified higher education expense?
  2. K-12 Education (tuition at private, public and religious schools)  
    In 2017, Congress expanded the approved use of 529 savings plans to include certain public, private or religious K-12 tuition expenses. Withdrawals of up to $10,000 per beneficiary per year for tuition may be taken as a qualified higher education expense from a 529 plan. The costs of textbooks, room and board, supplies and other expenses for K-12 education are not covered. Homeschooling expenses are currently not considered qualified higher education expenses.
  3. Student Loan Payment (amounts paid on qualified student loans)
    In 2019, Congress established a lifetime limit of $10,000 from a 529 plan that can be used without any penalties or tax consequences to repay a qualified student loan of the beneficiary or a qualified student loan of the beneficiary’s sibling, including federal and most private loans. Prior to these changes, any withdrawals for the purpose of student loan payments would have been subject to income taxes and other penalties.
  4. Registered Apprenticeship Program (fees, supplies and required equipment)
    More than 600,000 Americans have completed nationally registered apprenticeship programs. Anyone wanting to pursue a career in the trades can now use a 529 plan to support that pathway by using 529 funds to pay for certain eligible expenses associated with their apprenticeship. To learn more about registered apprenticeship programs, visit

One of the limitations often cited about 529 plans is that funds can only be used at eligible educational institutions for qualified higher education expenses. But with the recent expansion of approved uses for 529 plans, what was already a flexible savings option has grown into an even broader option for educational savings.

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