529 savings plans come with tax benefits designed to help your money grow, so you can use them to fund education. Case in point: 529 withdrawals are generally exempt from federal income taxes as long as you spend the money on qualified expenses.1 What counts as 529 qualified expenses? Let’s review some of the different types of costs you can cover with 529 accounts, including some lesser-known options.
1. College tuition and fees
College tuition to an eligible school, plus any fees required for enrolling in or attending college, counts as a qualified 529 expense. These fees can include, but are not limited to, lab fees, course fees, and student activity fees to fund on-campus organizations (but not costs to join individual clubs or activities).
Generally, an eligible school is any educational institution that can participate in a US Department of Education student aid program. That includes public, private, and community colleges and universities, as well as vocational schools and other postsecondary institutions. Not sure whether a school qualifies? Look for it on the Federal School Code List.
Learn more about the tax-smart way to help save for college.
2. College room and board
529 funds can be used for the cost of housing and meals, provided the student is enrolled at least half-time. The portion of those expenses your 529 plan can cover depends on whether the student lives on or off campus.
For students living on campus, all expenses related to housing and meal plans typically count as qualified educational expenses. If off-campus students’ costs exceed the school’s estimates for room and board, that excess doesn’t count as a qualified expense. For example, if your child’s college estimates room and board to cost $1,000 per month, that’s the most you can withdraw from your 529 to pay for housing. Not sure how much you should stash for these and other costs? Here’s what to consider when saving for college.
3. College textbooks and other course supplies
You can use 529 funds to pay for textbooks that courses list as required reading. The same goes for other course materials and required supplies, such as paper, pens, and even a graphing calculator. The school sets the max for these costs.
4. Computers, internet, and other related equipment
A laptop or desktop computer, software, printer, and scanner are also considered qualified educational expenses if they’re required for attendance or used primarily for educational purposes while a student is enrolled in school. Software primarily for entertainment, like computer games, typically do not count.
5. Special needs expenses
If your account beneficiary has special needs and requires certain services or equipment to attend college, you can often use money held in a 529 account to cover those expenses. You also could consider opening an Attainable Savings Plan (also known as an ABLE account) to invest and save for qualified disability expenses. Those might include the cost of a wheelchair, type-to-speech software, or other adaptive technology.
6. Student loan repayment1
You can use a 529 account—up to a lifetime limit of $10,000—to pay back student loan interest and principal. The lifetime limit applies per beneficiary, even if they have multiple 529 accounts. However, the beneficiary of a 529 can be changed to an eligible family member, like a sibling, so the funds can be used to repay up to their individual limit of $10,000 for student loans.2
7. Vocational or trade school expenses
While people use 529 accounts most often to help pay for college costs, these dollars can go toward other educational expenses. For instance, you can use 529 money to pay for tuition, fees, room and board (if applicable), textbooks, supplies, and potentially tools related to a vocation or trade. Apprenticeships may also qualify, as long as the program is registered with the US Department of Labor.
8. K-12 education expenses1
Qualified 529 expenses aren’t limited to post-high school life. You can use up to $10,000 per beneficiary per year to pay for tuition expenses for elementary, middle, and high school. This is true whether the school is public, private, or even religiously affiliated.
9. 529 transfers to Roth IRA3
What happens to money in a 529 account if the beneficiary doesn’t go to college or trade school, or earns scholarships and no longer needs the cash? While you could simply change the beneficiary to an eligible family member,2 you could instead transfer that money into a Roth IRA in the beneficiary’s name, provided you meet certain criteria.
Under certain circumstances, the IRS allows you to transfer a lifetime limit of $35,000 from a 529 into a Roth IRA. That can help boost retirement savings. You must meet the following criteria:
- You must set up both the 529 and the Roth IRA in the beneficiary’s name.
- The 529 plan must have been open for the designated beneficiary for at least 15 years.
- Transfers cannot exceed the annual Roth IRA contribution limit: That’s $7,000 in 2025, so it might take several years to transfer over the full amount.
- Transferred funds must come from contributions made to the 529 account at least 5 years prior to the transfer date.
To better understand qualified 529 expenses and 529-to-Roth-IRA transfers, consider contacting a tax professional.
10. Any of the above for an eligible family member2
If the account beneficiary doesn’t need the 529 funds, and a Roth IRA does not make sense, you can transfer the money to a relative. There’s no tax consequence for changing the beneficiary as long as they’re a family member of the original beneficiary by blood or marriage: This includes a sibling, stepsibling, spouse, parent, stepparent, parent-in-law, aunt, uncle, niece, nephew (or their spouse), or first cousin or their spouse. The account owner would just need to submit a beneficiary change form; this is likely available on their 529 plan’s website. If the new beneficiary is 37½ years younger than the original beneficiary, the original beneficiary may be liable for gift or generation-skipping transfer (GST) tax.