I'm thinking about transferring colleges and was wondering if the application fee for transferring could be covered by a 529 plan. Does anyone have experience using their 529 for this purpose?
While 529 plans are a fantastic resource to cover education-related expenses, unfortunately, college application fees (including those associated with transfer applications) are not considered a qualified expense. Therefore, they can't be covered by 529 plan distributions.
529 plan funds are specifically designed to cover "qualified education expenses," which typically include things like tuition and fees, books and supplies, and room and board for students who are at least half-time. Additionally, with the passage of the SECURE Act in 2019, up to $10,000 from 529 plan funds can also be used to repay student loans.
Using the funds for non-qualified expenses could result in tax penalties. So, it's important to stay informed about what expenses are deemed "qualified" to get the most benefit from your 529 plan and avoid unnecessary fees.
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