What Can a 529 Plan Be Used For?

As college acceptance letters keep rolling in, you're probably beginning to focus on how exactly you're going to pay for everything your child's education will cost. If you invested and saved in a 529 plan, you're saving your child the hassle of dealing with student loans. But what exactly can a 529 plan be used for? Potentially, more than you think.

Tuition

This one is a given. The money saved in your 529 plan can be used to cover your child's tuition throughout their full-time or part-time college careers at accredited institutions. Being accredited just means that the college has passed a review process — which most institutions have — but it's always a good idea to double check with the financial aid office.

Confirmed Books and Supplies

Any college student you speak to can attest to the fact that college textbooks can be wildly expensive. You can use the funds in your 529 plan to purchase books, online access codes, and lab supplies that are required for your child's classes.

Confirmed Room and Board

If your child lives on campus, you can use your 529 plan to pay for their dorm as long as the money goes straight to the university. However, if your child lives off campus, you can only use your 529 plan to pay for their rent up to the equivalent of a dorm cost.

• For example, if room and board on campus costs $8,000, you can only put that amount towards off-campus rent using the 529. Any rent higher than that will have to be paid for using other methods.

Computers (Sometimes)

You can use your 529 plan to purchase a computer as long as it will be primarily used by your child while they are in school. So if you purchase a laptop for them to take notes on in class, that's fair game. But if you purchase a desktop set for your home office, even if your student will use it sometimes, that doesn't count as a qualified purchase to use the 529.

Planning for college is a lot easier with the help of a financial advisor. American Investment Planners can assist with everything you need from 529 plans to helping with student loans. We are here to make everything as simple as possible. To schedule an appointment with one of our advisors, please call (516) 932-5130 or email info@americaninvestmentplanners.com.