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One of the misconceptions 529 programs struggle against is that college savings plans are only for traditional four-year programs.
Here’s the truth: 529 plans can be used for whatever comes after high school, as higher education takes many forms. This list includes not just four-year universities and colleges, but also community colleges, trade and specialty schools, certificate programs, graduate school, law school, and med school. And now, the list includes certain qualified costs for apprenticeships approved by the U.S. Department of Labor. Let Ohio’s 529 Plan, CollegeAdvantage, show you the facts.
529 plans aren’t just for four-year programs
Simply put, you can use the funds in your Ohio 529 Plan almost anywhere you are comfortable sending your child and your money. 529 plans can be used at any federally accredited educational institution, which is a post-secondary school that accepts federally financial aid. If you want to confirm that the schools your child is interested in attending — whether four-year, two-year, graduate, or vocational — accepts federal aid, then do a search to see if the institutions have a Federal School Code on the Free Application for Federal Student Aid (FAFSA). If the schools do, then you can use your 529 funds there.
Community colleges can be an excellent place to continue an education after high school. Usually lower in cost than a four-year program, your child can take required core classes that, in many cases, will transfer to other schools, or explore different courses while searching for their dream profession. Your student can work toward an associate degree or use the community college as a stepping stone to a traditional four-year university. Either way, a 529 plan can cover qualified high education expenses.
Does your child have a creative mind? Your 529 plan can help cover qualified costs at eligible institutions that are focused on the arts or music. Are they considering a career in religion? Your 529 plan can cover expenses at eligible universities.
If your child attends a federally accredited vocational or trade school after high school graduation, then these schools can provide a great education focused on specialized skills. Because of these schools’ close connections to professional trades, your child may graduate with a full-time, well-paying job already lined up. The schools’ areas of expertise can range from broadcasting, cosmetology, culinary arts, diagnostic imaging, graphic design, information technology, massage therapy, mortuary science, nursing, restaurant management, truck driving, to welding, to name a few. Your 529 plan may be applied here, too.
Most graduate schools — whether business, law, medical, dental, or other studies — are also be eligible institutions.
Ohio’s 529 Plan can be used nationwide
While you may have saved in Ohio’s 529 Plan, you can use your funds at both Ohio schools and schools nationwide. 529 plans can be used across the United States at any accredited post-secondary school that accepts federal financial aid.
529 plans withdrawals are tax free
One of the great advantages in saving in Ohio’s 529 Plan is all withdrawals are tax free when used for qualified higher education expenses at these accredited programs. These costs include all the major expenditures for attending an accredited institution like: tuition; room and board when a beneficiary is enrolled for at least half of the full-time academic workload; mandatory fees; computer equipment and related technology as well as internet services; books, supplies and equipment related to enrollment and class schedule; and certain expenses for a special-needs student. Room and board costs can also include rent for off-campus residency and groceries (non-taxable items), provided these costs are equal or less than the same room and board allowances from the accredited education institution.
While there are many paths forward for your kids, one thing is certain: Ohio's tax-free 529 Plan is the simple way to be ready to help. Your savings grow tax-free and stay tax-free when used for qualified higher education expenses. And Ohio's 529 Plan can be used at thousands of schools, nationwide.
No matter what kind of higher education your children choose someday, Ohio’s 529 Plan make its simple to start saving today.
Posted on May 15, 2019