Can You Use 529 Plan Money for More Than College?

Who this is for: parents exploring a residential therapeutic program with an educational component, and families who want to use 529 funds beyond a traditional four-year college.

This is not tax advice. State rules vary and may not match federal changes. Always check with your 529 plan and a tax professional.

What counts as a “qualified expense” under a 529 plan?

For colleges, universities and other eligible postsecondary institutions, qualified higher-education expenses include:

• Tuition and mandatory fees
• Books, supplies and equipment
• Computers, peripherals, software and internet access, if used primarily while enrolled
• Room and board for students enrolled at least half-time, capped at the greater of the school’s published allowance or the actual on-campus housing charge
• Special-needs services required for enrollment or attendance

These definitions come from IRS Publication 970 (the qualified tuition program chapter).

New for K–12: in July 2025, Congress broadened K–12 coverage. Beyond tuition, qualified K–12 expenses now include curriculum and materials, books and instructional materials, online educational materials, certain tutoring by qualified instructors, standardized, AP and 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 or secondary school. The expanded K–12 rules apply to payments made after the law was enacted in July 2025.

Residential therapeutic programs with an educational component

If your young adult enrolls in a residential program that includes accredited academics, 529 funds can typically be used. If they plan to take college courses later, you can also hold some 529 money back for the postsecondary expenses listed above.

At Ignite: 529 funds can be used for the entire cost of Ignite Adulthood for up to 93 days. Ask the admissions team for step-by-step instructions for paying with a 529 plan.

K–12 education (public, private and religious)

• Annual cap: $10,000 per student through 2025, rising to $20,000 starting in the 2026 tax year (federal).
• What’s covered now: tuition plus curriculum and materials, online educational materials, qualified tutoring, testing fees, dual enrollment, and educational therapies for students with disabilities from a licensed or accredited provider.
• State conformity: some states don’t follow the federal K–12 rules and may tax earnings or recapture deductions on K–12 withdrawals. Check your state’s position.

Registered apprenticeships

529 funds can cover required fees, books, supplies and tools for apprenticeship programs registered with the U.S. Department of Labor. You can confirm a program’s status on Apprenticeship.gov, and some 529 plans offer their own checker.

Student loan repayment

You can use up to $10,000 (lifetime) of 529 funds to repay the beneficiary’s qualified student loans, 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 for leftover 529 funds

Since 2024, unused 529 money can be rolled into a Roth IRA for the beneficiary if:

• The 529 account has been open for at least 15 years.
• The amounts rolled over were contributed more than five years earlier (plus their earnings).
• Total lifetime rollovers stay at or under $35,000.
• Each year’s rollover stays within the Roth IRA annual contribution limit, and the beneficiary has earned income that year.

Use a direct trustee-to-trustee transfer.

ABLE (529A) rollovers, now permanent from 2026

The 2025 law removed the sunset on 529-to-ABLE rollovers. They are permanently allowed, within the ABLE annual contribution limit, for tax years beginning after December 31, 2025. This can be a powerful option for beneficiaries with disabilities.

Postsecondary credentialing and licensing

The 2025 law also adds recognized postsecondary credentialing expenses as qualified 529 uses. That covers tuition, fees and materials for eligible credential programs, required testing fees, and required continuing education to keep a credential. Recognized programs include those on a state WIOA list, in the VA WEAMS directory, certain industry-recognized credentials, and registered apprenticeships.

Frequently Asked Questions About 529 Plans

Can 529 money pay for a therapeutic program for a young adult?

Often, yes, when the program includes a qualifying educational component. At Ignite, 529 funds can cover the full program cost for up to 93 days, and admissions provides the documentation your plan administrator needs.

Can I use a 529 plan for K–12 costs other than tuition?

Since July 2025, yes. Federal rules now include curriculum, tutoring, testing fees, dual enrollment and educational therapies for students with disabilities. Some states don’t conform, so check your state’s rules.

What happens to leftover 529 money?

You can change the beneficiary to another family member, use up to $10,000 toward student loans, roll up to $35,000 into the beneficiary’s Roth IRA under the 15-year rule, or (from 2026) roll funds into an ABLE account.

Paying for Ignite with a 529 plan

If your young adult is struggling at college or after it, Ignite accepts 529 plan payments. We can provide a separate tuition and education invoice and documentation to share with your 529 plan administrator and your tax professional. Talk with admissions and we’ll walk you through using a 529 plan to cover the program for up to 93 days.