Options for Using 529 Funds for Summer School


Options for Using 529 Funds for Summer School


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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:
  1. Through U.S. college and university study abroad programs where students spend one or two terms at a foreign university
  2. 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.


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