Ohio's 529 Plan Isn't Just For 4-Year Programs
One lingering myth about 529 plans is that they can only be used at a traditional four-year universities or colleges. Here’s the truth from Ohio’s 529 Plan, CollegeAdvantage: 529 plans can be used for whatever comes after high school, as a higher education takes many forms. This list includes not just four-year universities and colleges, but also two-year community colleges, trade, technical or vocational schools, certificate programs, apprenticeships, graduate school, law school, and med school.
529 plans aren’t just for four-year programs
Simply put, you can use the funds in your Ohio 529 account almost anywhere you are comfortable sending your child and your money. Ohio’s 529 Plan can be used nationwide 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, trade/vocational, or graduate — 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. For apprenticeships, the program must be registered with the Secretary of Labor’s National Apprenticeships Act in order to use a 529 plan withdrawal. Interested parties can check the U.S. Labor Department’s search tool to confirm that a program is registered, and therefore, eligible for a tax-free 529 withdrawal.
Use your 529 funds at community colleges
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. The Ohio Department of Higher Education (ODHE) offers help in transferring those credits earned at a community college to a four-year program.
Use your 529 funds at specialized colleges and universities
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.
Use your 529 funds at trade, technical, or vocational schools
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.
In Ohio, there is a robust network of trade schools, under ODHE, known as Ohio Technical Centers (OTCs). According to the ODHE website, “OTCs provide post-secondary career and technical education (CTE) through 50 career centers across Ohio. These institutions offer programming in the skill trades (i.e., HVAC, phlebotomy, police training, EMT, etc.) that prepare learners for certificates, industry-recognized certifications, and state licensures. OTCs are also part of the State of Ohio’s Career-Technical Credit Transfer (CT)2 that aligns educational programs at OTCs to degrees at community colleges and universities. Many of the OTCs are positioned to respond quickly to the needs of business and industry by providing customize trainings and business consultation services to companies in order to assist with meeting Ohio’s workforce goals.”
Use your 529 funds for apprenticeships
The State of Ohio also wants to help interested students find the perfect apprenticeship opportunity for them. Apprentice.ohio.gov shows the multitude of career occupations apprenticeships available throughout Ohio.
If your child is still interested in earning an associate’s degree, there are apprenticeship programs in Ohio where participant earn credits towards an associates of technical studies degree. ODHE’s Apprenticeship Pathways Initiative has linked apprenticeship programs with local two-year community colleges so participants can also earn a technical associate’s degree. Some of the trades cooperating in this program include electrical, sheet metal, carpentry as well as plumbers and pipefitters. Recent apprenticeship expansion grants have also dramatically increased the number of available apprenticeship programs on community college campuses around Ohio. These new programs are also built into a technical Associate’s Degree.
Use your 529 funds for grad school
Most graduate schools — whether business, law, medical, dental, or other studies — are also be eligible institutions.
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. For apprenticeships, 529 withdrawal will be tax-free when used for certain costs such as fees, textbooks, supplies, and equipment like required trade tools.
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.
A 529 account can be used for whatever education comes after high school. Every dollar saved today is a dollar that won’t be borrowed later, which makes Ohio’s 529 college savings plan an excellent alternative to student loan debt. Learn, plan, and start with Ohio’s 529 Plan today at CollegeAdvantage.com.
This article was originally posted in June 2016 and has been updated to reflect new information for 2022.
Posted on February 09, 2022