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Can a 529 Plan Pay for Grad School?

Jul 21, 2012

Today many college graduates that have recently finished their degree work in college have found that the supply of jobs for them is from few to zero. They are finding all their hard work and study is not going to get them the job they desire at this time. Many jobs that are available, are jobs not in your field of study or just paying an extremely low salary. The frustration this causes for the recent graduates is a hardship for them. They have been planning to enter the workforce and begin their careers.

Many students are deciding to go back to school now and earn another degree or attempt grad school. They take a low paying job just to make ends meet and go back to school, hoping when they finish a better economy awaits them and that great job.

The 529 plan they have been using still has money in it and they wonder if grad school can be paid with their 529 plan cash. Also can living expenses, books for grad school, and other related educational expense be paid with the 529 plan funds.

In Section 529 of the Internal Revenue Code created qualified tuition programs that make it possible to set aside money for college without paying taxes on the earnings. This money can be used for all the

There are no income limits on who can set up a plan, an important consideration for working adults. How much you can contribute depends on the plan. Distributions from the account must be used to pay for qualified higher education expenses.

According to the IRS, these costs generally include tuition, fees and related books, supplies and equipment, and room and board, if at least a half-time student. If you’re not sure which of your costs qualify, ask your CPA for more details.

Good news for the grad student.

Got further questions? Catch me on twitter and DM me @529SavingsPlans or e-mail me at 529CollegePlans at Want to be heard? Leave a reader comment below.

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