Options for Using 529 Funds for Summer School
If you were like many people growing up, a classroom was one of the last places where you wanted to spend your summer vacation.
But today’s kids are different. For a growing number of ambitious high schoolers, summer is an opportunity to earn college credits. And more and more college students are looking to get a jump on their careers by enrolling in summer session classes with an eye toward early graduation.
Parents of students enrolled in summer school can take financial comfort in knowing that funds from a tax-advantaged 529 account can often be used to cover the cost of classes, books, room, board, and more.
Let’s start with a list of surprising ways 529 funds can be used, and then we’ll add a few exceptions near the end of this blog.
Summer Programs and Related Costs that 529 Plans Cover
- Summer courses at a community college Many community college credits transfer to four-year institutions and cost significantly less per credit hour, making them an excellent opportunity for students of all ages to add credit hours toward college graduation or begin their college careers with credits under their belts.
- Room and Board Some current college students may stay on campus and take summer school courses full- or part-time at many eligible post-secondary education institutions. Even if the student chooses to live off-campus, 529 funds can cover rent and food up to the college’s designated room and board allowance.
- Study Abroad Programs Students looking to expand their horizons beyond the U.S. borders will be happy to know that 529 funds can be used for summer study abroad programs offered by eligible colleges and universities. There are generally two different ways to study abroad:
- Through U.S. college and university study abroad programs where students spend one or two terms at a foreign university
- By enrolling directly in a foreign college or university
529 funds can be used to cover tuition expenses for both, provided the college or university is eligible for Title IV federal student aid. Keep in mind that 529 funds cannot be used to cover travel expenses such as airfare for study abroad programs.
- Gap year programs Who says that students have to start college directly after finishing high school? Students who want to learn but not spend a year sitting in a traditional classroom can apply 529 funds to college credit programs offered by eligible, accredited institutions.
Summer Programs a 529 Won’t Cover
Summer Camps
While 529 funds can cover study abroad and some education-related gap-year expenses, costs associated with most summer camps don’t qualify. Similarly, backpacking through Europe or South America is also not covered. While these experiences are enriching opportunities to develop independence and life-long lessons, you most likely won’t be able to use 529 plan funds to cover their costs.
Summer Internships
If an internship is in the works, budget accordingly. Internship-related costs, including housing, travel, and food, are not considered qualified education expenses, so 529 funds cannot be used to cover them without tax consequence. However, if you are earning credits for a summer internship through an eligible degree-granting institution, you may be able to use your 529 funds to cover the tuition associated with the internship program.
A 529 account is a great way to start saving for future education needs and is flexible enough to cover a wide array of expenses, including some summer school options.
Visit our Learning Center to learn more about saving for education with a 529 plan, and consider opening a tax-advantaged account with The Education Plan today.
Frequently Asked Questions
A 529 plan is a tax-advantaged investment account that is designed to grow savings for future education expenses for a specified beneficiary. 529 plans offer unique benefits and features that make them an appealing strategy for education related saving.
A 529 plan can be used for “qualified educational expenses.” For federal tax purposes, qualified educational expenses include:
- Tuition and fees at accredited higher education institutions
- Books
- Supplies and equipment
- Room and board for beneficiaries attending on at least a half-time basis.
- Computer technology, equipment, and internet access
- Up to $10,000 a year for K-12 tuition and expenses (Limit increase to $20,000 in 2026)
- Expenses for educational special needs services
- Transfers to an ABLE account for the beneficiary (transfer subject to annual limit)
- Apprenticeship expenses
- Up to $10,000 for student loan repayment
- Credentialing expenses and certification programs
- Roth IRA rollover for the beneficiary
If you're not sure if an expense is considered "qualified," we recommend consulting with a tax professional or advisor. Unqualified expenses will be treated like ordinary income: state and federal taxes will apply, with a 10% federal penalty for withdrawals from your 529 plan used to pay for them.
New Mexico residents can deduct contributions to The Education Plan from their state taxable income each year. This includes contributions made to an account that you are not the account owner of.
You cannot deduct contributions from federal income taxes.
Any person at least 18 years old with a valid Social Security Number (SSN) or Tax Identification Number (TIN) can open a 529 account. The account holder chooses the investment options, designates a beneficiary, and requests the distribution of funds.
The cost of college continues to rise, including tuition, housing, food and supplies, so it’s important to begin saving as soon as possible. You can learn more about how much a typical college education costs on our Cost of College page. It’s never too early or too late to start.
The Education Plan offers a variety of investment options to fit you and your family’s needs, risk tolerance and goals. You can see all of the available investment portfolios on the investments page.
Yes, you can use up to $20,000* a year to cover tuition and expenses for K-12 education.
Qualified K-12 expenses include:
- Tuition (public, private, and religious)
- Curriculum materials, books (including digital/online) and instructional materials
- Tutoring and instructional classes**
- Fees for a nationally standardized norm-referenced achievement test, an advanced placement examination, or any examinations related to college or university admission
- Dual enrollment program fees
Educational therapies for students with disabilities provided by a licensed or accredited practitioner or provider, including occupational, behavioral, physical, and speech-language therapies
*Starting in tax year 2026. The annual limit is $10,000 in tax year 2025 and permitted for tuition only.
**Tuition for tutoring or educational classes outside of the home, including at a tutoring facility, but only if the tutor or instructor is not related to the student and—
(i) is licensed as a teacher in any State,
(ii) has taught at an eligible educational institution,
or (iii) is a subject matter expert in the relevant subject.
You can open an account with The Education Plan online or by mailing in the enrollment form. In order to open an account, you will need the following information:
- Your social security number or TIN
- Your address
- Your bank account information (in order to fund the account)
- The beneficiary’s social security number or TIN
- The beneficiary’s birthday
-The beneficiary’s address
