Managing Your Money

Living off campus? You can still use 529 plan money

Money in a 529 plan can obviously be used for things like tuition, fees and books but many people do not know that 529 plan money can also be used for room and board expenses and can even be used if the student lives in an off-campus apartment (assuming the student attends college on at least a half-time basis).

There are limits, so you can't use money in a 529 plan to rent a high end, luxury apartment. And, the limits can vary by school and by 529 program so it is important to check your plan's documents and you also need to contact the college and ask what figures it reports to the Department of Education for its cost of attendance. This information would be available from the the school's financial aid office.

Once living in the off campus apartment, you should save copies of the lease and the monthly rent checks. You should also save receipts for food purchases. Finally, you need to remember that 529 withdrawals must be timed to match expenses that occur in the calendar year (not the school year) so be sure to match the December checks with December 529 plan withdrawals and the January checks with the the next calendar year withdrawals.

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