All the way to use the leftovers from your child’s 529 savings

You are aiming to be a parent for 10 years and have saved enough with 529 plans to fund your child’s private college education. Imagine your surprise when a little bagger decides not to go to college at all (or when he enrolls in a much cheaper school). Nowadays, a lot of money is tied up in investment vehicles with limited uses, but fortunately there are still options.

Consider changing beneficiaries

The beneficiaries of the 529 plan can be changed to another family member, such as another child, yourself, cousin, parents, grandparents, aunt, uncle. Many 529 plans allow you to change the beneficiaries of the plan once a year, allowing you to spread your love to others in your higher education aspirations.

Pay for pre-high school and post-university education

The 529 can be used to cover other eligible pre-high school and post-university education costs. From 529 in both public and private primary, middle and middle schools, you can pay up to $ 10,000 per beneficiary. Other usage restrictions may apply. Even if someone in your family is not a college student, you may be able to monetize some of your 529 savings by changing recipients...

You can also use the 529 funds to repay a student loan of up to $ 10,000 for a beneficiary’s lifetime. This is useful if you can change the beneficiary to someone who already has a student loan.

Used for other types of post-secondary education

The 529 can be used to pay more than the traditional four years of college education. It can also be used to cover two-year programs, trade and vocational schools, and even schools outside the United States. In general, schools that are eligible to participate in student support programs through the Ministry of Education are also eligible for 529. Use of funds. To check if a US school is eligible Savings for college online tools..

Remember what counts as education costs

The 529 plan can be used to cover more than tuition fees.Can also be used for other payments Eligible expenses Includes required fees, books, consumables, and computer-related costs. For students who go to school at least half-time, room and even food costs can be covered by the 529 plan.

Take cash as a last resort

If you can’t find a way to spend it for some kind of education for someone in your family, your money won’t be trapped forever. However, if you use 529 for non-covered costs, you are considering paying federal income tax and a 10% penalty on the income portion of 529. ((((Donation amount itself Donations are made in post-tax dollars and are not subject to income tax or penalties.

One exception to paying a penalty is if the beneficiary receives a full scholarship to the university. However, you still have to pay income tax.