Can You Use 529 Plan Money for More Than College?
The 2025–2026 Guide to Alternative Uses (K‑12, Educational Therapies, Apprenticeships, Student Loans, Roth IRAs & More)
Who this is for: Parents exploring a residential therapeutic program with an accredited school component and families who want to use 529 funds beyond a traditional four‑year college.
Quick answer: Yes. 529 plans now cover a surprisingly wide range of qualified expenses—far beyond standard college tuition. In addition to higher‑ed costs (tuition, fees, books, computers, room & board for half‑time or more), 529 funds can cover K‑12 expenses, registered apprenticeships, limited student loan repayment, and—starting in 2024—rollovers to a Roth IRA under strict rules. A July 2025 federal law expanded K‑12 coverage and made 529‑to‑ABLE rollovers permanent beginning in 2026 (details below).
*Not tax advice. State rules vary and may not match federal changes. Always consult your 529 plan and a tax professional.
What counts as a “qualified expense” under a 529 plan?
For college, university, and other eligible postsecondary institutions, qualified higher‑education expenses include:
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Tuition & mandatory fees
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Books, supplies, and equipment
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Computers, peripherals, software, and internet access (if primarily used while enrolled)
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Room & board (if enrolled at least half‑time; capped at the greater of the school’s published allowance or the actual on‑campus housing charge)
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Special needs services required for enrollment/attendance
These definitions come directly from IRS Publication 970 (QTP chapter).
NEW & notable (K‑12): In July 2025, Congress broadened K‑12 coverage. In addition to tuition, qualified K‑12 expenses now include curriculum and materials, books/instructional materials, online educational materials, certain tutoring by qualified instructors, standardized/AP/college‑admission exam fees, dual‑enrollment fees, and educational therapies for students with disabilities (including occupational, behavioral, physical, and speech‑language therapies)—for students enrolled at a public, private, or religious elementary/secondary school. Distributions for these expanded K‑12 expenses are effective for payments after enactment (July 2025).
Key alternative ways to use 529 funds (2025–2026)
Residential therapeutic programs with an accredited school component (how it works)
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If your child enrolls in a residential treatment program that includes an accredited academics, 529 funds can typically be used.
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Tip: If your student will take college courses later, you can also reserve 529 for postsecondary qualified expenses noted earlier.
At our program: 529 funds can be used for the entire cost of Ignite Adulthood up to 93 days. Ask Admissions team for step‑by‑step instructions for 529 payment.
K‑12 education (public, private, religious)
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Annual cap: $10,000 per student through 2025; increases to $20,000 starting in the 2026 tax year (federal).
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What’s covered now: Tuition plus curriculum/materials, online educational materials, qualified tutoring, testing fees, dual‑enrollment, and educational therapies for students with disabilities (licensed/accredited provider).
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State conformity warning: Some states don’t follow federal K‑12 rules and may tax earnings/recapture deductions on K‑12 withdrawals. Check your state’s stance.
Registered Apprenticeships
529 funds may cover required fees, books, supplies, and tools for DOL‑registered apprenticeship programs. You can confirm a program’s status on Apprenticeship.gov (your plan may also provide a checker).
Student loan repayment
You can use up to $10,000 (lifetime) of 529 funds to repay qualified student loans of the beneficiary and up to $10,000 for each sibling. Interest paid with 529 earnings doesn’t also qualify for the student loan interest deduction.
Roth IRA rollovers (leftover 529 funds)
Starting in 2024, you can roll over unused 529 funds to a Roth IRA for the beneficiary if:
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The 529 has been open at least 15 years,
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Amounts rolled over were contributed more than 5 years earlier (plus earnings on them),
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Total lifetime rollover ≤ $35,000, and
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Annual rollovers are subject to the Roth IRA annual contribution limit and the beneficiary must have earned income for the year.
Use a direct trustee‑to‑trustee transfer.
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ABLE (529A) accounts—rollovers made permanent beginning 2026
A 2025 law removed the sunset: 529‑to‑ABLE rollovers are permanently allowed (subject to the ABLE annual contribution limit), effective for tax years after Dec. 31, 2025. This can be powerful for beneficiaries with disabilities.
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Postsecondary credentialing & licensing (new category)
The 2025 law adds recognized postsecondary credentialing expenses as qualified 529 uses—covering tuition/fees/materials for eligible credential programs, required testing fees, and required continuing education to maintain a credential. Recognized programs include those on a state WIOA list, in the VA WEAMS directory, certain industry‑recognized credentials, and registered apprenticeships. Effective for distributions after enactment.
Is your young adult struggling at college? Our Program accepts 529 plan payments
- Ask us for a separate tuition/education invoice (we’ll itemize qualified K‑12 charges).
- We’ll provide documentation to share with your 529 plan administrator and your tax professional.
- Have questions? Talk to Admissions—we’ll walk you through using a 529 plan to cover our program for up to 93 days