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529 Qualified Expenses: What can you use Leftover 529 Money for?

Updated: Jun 19, 2023


Are you planning to save for your child's college education but unsure about the expenses that a 529 plan covers? You're not alone. Many parents struggle to understand the different aspects of a 529 plan, including what it can be used for and what it cannot.


In this article, we'll dive deep into what expenses you can pay for with a 529 plan, how to use it, and some tips to make the most of it.


What is a 529 plan?

Before we dive into the details, let's first understand what a 529 plan is. A 529 plan is a savings plan that is designed to help parents and other individuals save for future college expenses. The funds in a 529 plan can be used to pay for a wide range of educational expenses, including tuition, room and board, books, and other fees.


What can you pay for with a 529 plan?

Now that you know what a 529 plan is, let's talk about what expenses you can pay for with it. Here is a list of qualified education expenses that can be paid for using a 529 plan:


1. Tuition fees

The most significant expense in any college education is tuition fees. Tuition fees can be covered using a 529 plan, whether you are attending a public or private institution. It's important to note that the amount of tuition fees that can be covered using a 529 plan is subject to the limits of the particular state plan.


2. Room and board expenses

Another significant expense associated with the college is room and board expenses. A 529 plan can be used to cover the cost of room and board expenses, including rent, utilities, and meal plans. However, there is a limit to the amount that can be covered.


3. Textbooks and other required supplies

Textbooks and other required supplies such as laboratory equipment, art supplies, and computer software can be purchased using a 529 plan. However, it's important to note that the supplies must be required for the course, not optional.


4. Computers and peripheral equipment

Computers and peripheral equipment such as printers, scanners, and internet access fees can be purchased using a 529 plan. However, the equipment must be used primarily by the beneficiary and must be required for enrollment or attendance at an eligible institution.


5. Special needs expenses

Special needs expenses, including tutoring and other services, can be covered using a 529 plan. It's important to note that the expenses must be related to the beneficiary's special needs and must be required for enrollment or attendance at an eligible institution.


6. Student loan repayments

Another unique aspect of a 529 plan is that it can be used to pay for student loan repayments up to a maximum of $10,000 per beneficiary. However, this benefit is limited to one-time payments and only applies to the beneficiary's loans or their siblings' loans.



Tips to make the most of your 529 plan

Now that you know what expenses can be paid for using a 529 plan let's talk about some tips to make the most of it.


1. Plan ahead

It's important to start saving early for your child's college education. The earlier you start, the more you will be able to save, and the less you will have to worry about when it comes time to pay for college.


2. Contribute regularly

Make regular contributions to your 529 plan to ensure that you are saving enough for your child's education. Consider setting up automatic contributions to make it easier to save.


3. Understand the limits

It's important to understand the limits of your 529 plan. Each state has different contribution limits and investment options, so make sure you know the rules and restrictions of your plan.


4. Use it wisely

Be mindful of how you use the funds in your 529 plan. It's important to only use them for qualified education expenses to avoid tax penalties.


5. Re-evaluate your plan regularly

It's a good idea to regularly re-evaluate your 529 plan and make any necessary adjustments. You may need to increase your contributions or change your investment strategy based on changes in your financial situation or your child's educational needs.



In conclusion, a 529 plan is a valuable tool to save for your child's education and can cover a variety of qualified education expenses. However, it's important to understand the limits of your plan, contribute regularly, and use the funds wisely.


At Iota Finance, we understand the importance of saving for your child's education and want to help you make the most of your 529 plan. Schedule a free consultation with us today to learn more about how we can help you achieve your financial goals.

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