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What Are 529 Plan Qualified Expenses?

What Are 529 Plan Qualified Expenses?

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The purpose of a 529 plan is straightforward at first glance: to provide families with a tax-advantaged account for future education expenses. But not all education costs are eligible.How Can I Use Funds From a 529 Plan?

You can use the money from a 529 plan to pay for eligible education expenses. You can even use funds from a 529 plan to pay for ineligible expenses, but you’ll have to pay some fees at tax time. Here are examples of what you can use 529 funds for:Tuition and Fees

The most common way that people use 529 funds is to pay for college tuition and fees. And while some parents think they can only use a 529 to pay for college costs, those funds can also be used to pay for K-12 expenses. If your child attends private or parochial school, you can use a 529 to pay up to $10,000 a year in tuition.

Students who attend trade or vocational schools can also use 529 funds if the school is a Title IV institution. You can look up a particular trade or vocational school’s 529 eligibility using Saving For College’s lookup tool.Room and Board

Your 529 plan funds can cover most room and board expenses, whether you’re living in a college dorm or an apartment with five of your best friends. However, not all of your rent and utilities may be eligible if you live off-campus.

You’re only allowed to spend the amount your college has stated is the average cost of room and board. Any amount exceeding that figure won’t count as a qualified educational expense. You can still rent an apartment that costs more, but you’ll have to either pay the difference out of pocket or pay a 10% penalty and income tax on the difference.

Contact your school’s financial aid department to find out the room and board allowance and try to stay under that figure so you don’t get hit with the extra tax penalty.Books and Supplies

Textbooks are qualified expenses, but only books on your class reading list qualify. In other words, you can’t buy unrelated books and expect them to qualify as expenses. Also, any required class supplies are 529-eligible, such as binders, notebooks, pens and pencils.Computers and Tech

You can buy a laptop or desktop with 529 funds, and you can even use the money to pay for your monthly internet bill. If your school requires any other equipment, like a webcam or software, you can use 529 funds to pay for those items, too.

For example, if you’re a graphic design major and you need to buy Adobe software to complete a project, you can use your 529.Special Needs Services

Students who need any kind of special needs service can use 529 funds to cover those costs. This may include specific adaptive equipment that a student needs to attend class or turn in assignments.Student Loan Payments

Most assume they can only use the money in a 529 to pay for current college-related expenses. But since the SECURE Act of 2019, you can put up to $10,000 from your 529 toward existing student loans. That $10,000 figure is a lifetime limit, not an annual one, and applies to both federal and private student loans.Study Abroad

If you’re studying abroad in a program sponsored by your university, you can use 529 funds to pay for room, board and tuition costs.

However, not all the costs of studying abroad count as qualified education expenses. For example, the plane ride, souvenirs and museum visits don’t qualify.Foreign Schools

You’re not limited to using money in a 529 to pay for American schools. If the beneficiary enrolls in a foreign university, they may be able to use a 529 to pay for that tuition. However, that school must be a Title IV institution. You can find a full list of qualifying foreign schools here.Surprising Expenses That Aren’t Eligible

Not all college-related expenses are eligible, even if they seem necessary. For example, you can’t use 529 funds for transportation expenses like traveling to campus or going home during school breaks.

Here are some other expenses that don’t qualify:School-sponsored health insuranceCollege entrance and application feesFraternity or sorority fees (you can use 529 funds to pay for meals at a fraternity or sorority, but dues are considered ineligible expenses)Fees for activities and clubsOther living expenses

What if I Saved More Than I Can Spend?

Some parents find themselves with more money than they need in a child’s 529, often because they saved too much or because their child received more scholarships and grants than they predicted.

If you end up having more than you need in a 529, there are other ways to spend that money without paying taxes and the 10% penalty.

You can always keep the money in the same 529 and change the beneficiary. For example, if you have other children, you can make them the beneficiary instead of your current college-bound child. If you have other relatives, you can also make them the beneficiary. You won’t incur any special fees by doing this.

If your child is attending graduate or professional school, they can also use the 529 to pay for the same expenses that they incurred for their undergraduate degree.What Happens if I Make a Non-QualifiedPurchase?

If you make a non-qualified purchase, you’ll have to report the money as income on your taxes. That means you may pay federal, state and local taxes on the funds. You’ll also owe a 10% penalty.

Still, if you have extra money and can’t think of anything else to use it for, then making a non-qualified purchase may be your best option.Best Student Loan Refinance Lenders Of 2023

Find the best Student Loan Refinance Lenders for your needs.


Health Insurance

Student Eligibility and Enrollment Informationrequired-med-insuranceRequired Medical Insurance

Massachusetts State Law requires that all college students be enrolled in a health insurance program that meets required benefits established by the state.

All matriculating, undergraduate students, enrolled in one or more credit hours; and all matriculating, graduate students enrolled in nine or more credit hours are eligible and will be charged for health insurance.

Please note that all students who withdraw from or drop all of their classes within the first 31 calendar days of the academic semester will not be allowed to be enrolled in the university student health insurance plan.online-studentsOnline Students

Online courses are not considered eligible credits. Students enrolled exclusively in online classes only are not eligible for this plan.international-studentsInternational Students

The University of Massachusetts Lowell requires that all international students must enroll in the university student health insurance plan. The university does not consider foreign insurance or travel insurance as comparable coverage to waive the university health insurance.

If you are covered by an embassy-sponsored health insurance plan and provide Student Financial Services Office with your financial guarantee prior to the waiver deadline, you will not be enrolled in the Student Health Insurance Plan.

If you are covered by a health insurance plan that is filed and approved in the United States, please contact University Health Plans at 800-437-6448. The United States health insurance plan must provide Minimum Essential Coverage as defined by the Affordable Care Act and include the following benefits in the campus area.Unlimited policy maximumPre-existing condition coverageNon-emergency medical servicesMental/behavioral health carePregnancy and maternity coveragePrescription drug coveragePreventative and wellness services and chronic disease managementRepatriation and medical evacuation

Please note, health insurance plans marketed solely to international students are generally not filed and approved in the United States and have limited benefits with coverage periods that do not comply with the Massachusetts Student Health Insurance Plan Regulations as well as the University’s health insurance requirements. ISO, PSI, Student Medicover, Tokio Marine, and NYIS Insurance are examples of companies that do not meet the insurance requirements.SHIPStudent Health Insurance Plan (SHIP)

The University Of Massachusetts Lowell offers Blue Cross Blue Shield of Massachusetts – Blue Care Elect (PPO) as the student health insurance plan. The plan is administered by University Health Plans. For information about the student health plan and a summary of benefits, please view the University Health Plans website.

It is recommended that students living outside of New England consider enrolling in the UML-sponsored health insurance plan (SHIP) as most plans based outside of New England cover only emergency services outside of their coverage area. SHIP coverage begins August 1 of each year and continues until July 31 of the following year.comparable-coverageComparable Coverage

Health insurance is mandatory and is available through the university for those who are unable to prove they have equal or better coverage.

If you belong to any type of managed care plan (i.e. an HMO or PPO), or other private insurance; check to see if they will cover lab tests and prescriptions ordered by Student Health Services. Many will not so students must be prepared to pay for these themselves and then seek reimbursement from their insurer if that is allowable by the insurer. In addition, per Massachusetts General Law (956 CMR 8.00: Student Health Insurance Program) students living outside of their insurance coverage area while attending UMass Lowell may not waive participation in the School Insurance Plan if your insurance provider only provides coverage (with the exception of services for life threatening emergencies) through a closed network of providers that is not reasonably accessible.

Comparable coverage benefits, subject to change, include:Comprehensive coverage of primary and preventative care, emergency services, surgical services, hospitalization benefits, ambulatory patients services and mental health benefits.50,000 maximum aggregate indemnity per illness or injury per year.Coverage 24 hours a day, anywhere in the world for a 12-month period with some exclusions, co-payments and deductibles.

If you have comparable coverage under a parent’s insurance plan or other major medical insurance plan; you can waive the student health plan. Note: You cannot waive the student health insurance plan with Mass Health Limited, Health Safety Net or Children’s Medical Security Plan.

The policy must be a US health insurance plan that is filed and approved in the US. International insurance plans, travel insurance, and short-term limited duration plans are not accepted.

The policy must provide coverage for the entire academic year (Aug. 1 – July 31) with no break in coverage.how-to-waiveHow to Waive / Enroll in the Student Health Plan

Students who have comparable health insurance with coverage while they live in the Lowell area, may select to waive the university student health insurance plan once your semester bill has been issued. The deadline for the waiver option on the second Friday of October for the fall semester; and on the second Friday in March for the spring semester. Information on waiving or enrolling in the university health plan may be found on the Student Financial Services webpage on the The Solution Center website.

The waiver process must be completed annually.insurance-contactStudent Health Insurance Contact Information

Questions about the health insurance charge or health insurance waiver should be directed to the Solution Center by phone: 978-934-2000 or email: TheSolutionCenter@uml.edu.

Questions about a health insurance claim should be directed to University Health Plans by phone: 833-251-1123 or email: info@univhealthplans.com.

Specific benefits questions you have about receiving your insurance card should be directed to Blue Cross Blue Shield of Massachusetts Member Services by phone at 888-753-6615.

To request an insurance member ID, update your address, or ask general plan information, contact University Health Plans by phone 833-251-1123 or email: info@univhealthplans.com.who-to-seeWho To See for Medical or Mental Health Issues

If you have school insurance, you should be seen in the Wellness Center (978-934-6800) for any medical or mental health problem. Please note that there is a $150 deductible for an emergency room visit, if you are not admitted to the hospital.patchactProtecting Access to Confidential Healthcare (PATCH) Act

Your right to confidentiality and privacy are important to us. The Commonwealth of Massachusetts recently enacted new privacy protections to your health care information. Learn more about how the Protecting Access to Confidential Healthcare (PATCH) Act can impact you.


Student Insurance Referrals

The Student Health Center physicians and nurse practitioners provide a full range of primary care services. If specialized care is required, the staff will provide you with a referral for outside care in and around the Williamsburg community. We will also assist you in completing the necessary paperwork so that you may receive the highest level of coverage available from your private or school-sponsored health insurance plan.Student Insurance Plan

The William & Mary-sponsored Student Insurance Plan REQUIRES students to use the resources of the Student Health Center (SHC) first, where treatment will be administered or a referral issued. To obtain a referral call the SHC at (757) 221-2998 to schedule an appointment with a provider. Medical treatment obtained from outside the SHC for which no prior approval or referral is obtained will be excluded from coverage. A SHC Referral is NOT necessary only under the following conditions:Medical Emergency. The student MUST return to the SHC for necessary follow-up care.When the SHC is closed.When service is rendered at another facility during a school break or vacation period (the school is closed).Medical care received when the student is more than 10 miles from campus.Medical care is obtained when a student is no longer able to use the SHC due to a change in student status (part-time, continuous enrollment or graduated).Maternity, obstetrical and gynecological care.Mental Illness treatment and Substance Use Disorder treatment, psychotherapy.

Dependents are NOT eligible to use the Student Health Center (SHC) and therefore are exempt from the SHC Referral Requirement. This applies to Students only and Outpatient Services only.

Please note that the referral is only valid for one policy year (08/01-07/31) and only for the condition for which the referral was originally written. If you have any questions or are in doubt about whether or not you should obtain a referral, please contact the [[student.insurance, Student Insurance Coordinator]] by email or phone at (757) 221-2978.Private Insurance

Many insurance policies such as managed care or HMO’s require the patient to obtain a referral from their primary care physician PRIOR to being evaluated or treated by a specialist. It is the patient’s responsibility to know if your health insurance plan requires you to obtain such a referral. It is important to note that in some cases a Student Health Center referral may not be sufficient if your health plan requires you to obtain a referral from your designated primary care provider as a condition of payment. Check with your insurance company to ensure that you comply with your policy provisions.

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