Can a 529 Plan Be Used to Pay for Room and Board?


Can a 529 Plan Be Used to Pay for Room and Board?


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Many families face sticker shock when looking at college tuition costs. But there is another significant college expense outside of tuition that is often overlooked when planning to save for future education – room and board.

Investing in a tax-advantaged 529 plan like The Education Plan® can help ease the burden of a variety of education expenses including room and board while your child attends college.

How Much is It Going to Cost?

First, let’s put this in perspective. Not everyone is going to experience significant room and board expenses. Housing costs might be minimal if your child chooses to live at home during college. Even if they move away to attend college, the cost of rent, food, and other necessary expenses might be surprisingly reasonable.

However, based on numbers provided by the College Board, room-and-board scenarios can be costly, especially if you’re looking ten to twenty years down the road. For the 2022-23 school year, the College Board lists annual room/board costs as $12,310 for public four-year colleges (in or out-of-state) and $14,030 for private four-year colleges, and these numbers will likely grow in the coming years.

Based on those figures, four years of room-and-board expenses could be more than $55,000. If you’re saving for a young child who will attend college in 12-18 years, that figure will likely be much larger after you factor in annual inflation rates.

529 Savings Can Ease the Burden

Students may live on or off-campus; however, if your student decides to live off-campus (and a surprising 87% do!), your withdrawal from a 529 plan is limited to what you would pay for your student to live on campus. Any amount above that threshold would not be considered a qualified expense.

Good news–rent in the summer while attending summer school is usually covered, as are expenses associated with many study abroad programs, as long as these programs are approved for credit by your child’s college or university.

What Expenses Qualify?

Fortunately, the guidelines for using tax-advantaged 529 savings for room-and-board expenses are straightforward. To qualify, a student must be:

  • Enrolled at least half-time at an “eligible institution,” which means a college/university eligible for Title IV federal student aid. Click here to research which institutions qualify.
  • Pursuing a degree or certificate program or another recognized credential.

There are some cases where you won’t be able to use 529 savings for living expenses. You cannot use 529 disbursements to cover room-and-board costs for students taking continuing education courses or to pay for the mortgage on a house, condo, or other residential property while the student lives there.

Also, students attending college/university while still completing their elementary or secondary school education (which includes those participating in dual enrollment programs) are ineligible to access 529 plan funds for room-and-board expenses.

On-Campus or Off–You’re Covered

For what we think of as “living on campus” (aka, the dorms), accessing the funds in a 529 plan with The Education Plan is easy.

You can have the 529 plan send a check directly to your school to cover on-campus room and board, including meal plans. In addition, students or their parents can pay for room and board out of pocket and then get reimbursed by the plan.

For students living off-campus, using 529 funds is also an option. The expense of off-campus housing is covered up to the maximum amount of the school’s cost of attendance (including utilities and groceries). Make sure to keep records of expenses and then apply for reimbursement.

Amounts above a college/university’s cost of attendance are not considered qualified, so parents and students should keep this in mind when searching for off-campus housing and confirm the reimbursement cap/amount with the student’s school.

A Great Way to Save

Ready to get started? You can open a tax-advantaged 529 account with The Education Plan in about 15 minutes. And anyone can contribute to the account, including grandparents, friends, and extended family members. Get started here.


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For more information about The Education Plan, call 1.877.337.5268 or view the Plan Description and Participation Agreement, which includes investment objectives, risks, charges, expenses, and other important information; read and consider it carefully before investing.

Please Note: Before you invest, consider whether your or the beneficiary’s home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in that state’s qualified tuition program. You also should consult a financial, tax, or other advisor to learn more about how state-based benefits (or any limitations) would apply to your specific circumstances. You also may wish to contact directly your home state’s 529 plan(s), or any other 529 plan, to learn more about those plan’s features, benefits and limitations. Keep in mind that state-based benefits should be one of many appropriately weighted factors to be considered when making an investment decision.

The Education Plan is administered by The Education Trust Board of New Mexico. Ascensus College Savings Recordkeeping Services, LLC, the Program Manager, and its affiliates, have overall responsibility for the day-today operations, including investment advisory, recordkeeping and administrative services. The Education Plan’s portfolios invest in: (i) mutual funds; (ii) exchange traded funds; and/or (iii) a funding agreement issued by New York Life. Investments in The Education Plan are not insured by the FDIC. Units of the portfolios are municipal securities and the value of units will vary with market conditions.

Investment returns will vary depending upon the performance of the portfolios you choose. You could lose all or a portion of your money by investing in The Education Plan depending on market conditions. Account owners assume all investment risks as well as responsibility for any federal and state tax consequences.

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The Education Plan® and The Education Plan® Logo are registered trademarks of The Education Trust Board of New Mexico used under license.

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Not FDIC-Insured. No Bank, State or Federal Guarantee. May Lose Value.