Can I use my 529 College Savings Plan for Off-Campus Housing?

Written by Burlington, VT Financial Advisor Katie Bensel

While room and board are considered qualified educational expenses, it is stipulated that these qualified expenses are paid directly to the college or university.

That being said, what if a student selects to live off campus? Do they still qualify to utilize 529 College Savings Plan funds to pay for this off-campus housing?

The short answer is somewhat.

Off-campus student housing may be considered a qualified educational expense for 529 College Savings Plans if the amount utilized remains equal to or below the college’s room and board estimate for that academic year.

For example:

Amy will be a senior this year and has decided to move off-campus with a group of friends. Her share of the rent for the year is $15,000. According to her university, the estimated cost of room and board for this academic year is $10,000. This means that $5,000 of Amy’s rent would not be considered a qualified expense.

If Amy proceeded with utilizing $15,000 of her 529 College Savings Plan to cover her off-campus rent, the earnings portion of the unqualified $5,000 would be subject to taxes and possibly a 10% penalty.

*When encountering any college expense outside of the standard qualified educational expenses, it is recommended that you consult your 529 college savings plan provider for information specific to your plan.