How To Use 529 Funds To Pay for Studying Abroad

A college student using a 529 plan to study abroad

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Studying abroad in college can be an eye-opening experience, but there's just one potential obstacle: the price tag.

On average, the cost of studying abroad ranges between $7,000 and $15,000 per academic semester. While student loans, study abroad scholarships, and grants may cover some of that, there is another option. If you've contributed money to a 529 college savings plan for college expenses, those funds can be used to pay study abroad expenses, too.

Key Takeaways

  • You can use 529 college savings plan funds to pay for qualified education expenses such as tuition, room and board, and textbooks.
  • Travel-abroad expenses such as airfare or international health insurance would not be qualified education expenses and could not be paid for with 529 funds.
  • Before you commit 529 funds, make sure the host school abroad is eligible to participate in the Department of Education's student financial aid system.

Using a 529 Plan To Pay for the Cost of Studying Abroad

529 plans are designed to offer a tax-advantaged way to save for qualified higher education expenses at eligible colleges and universities. The types of expenses typically covered include:

  • Tuition and fees
  • Room and board
  • Textbooks
  • Computer software and equipment

The same rules that apply when using 529 funds to pay for college in the U.S. carry over when using the money to cover the cost of studying abroad. Simply, for a 529 plan withdrawal to be considered qualified and thus, tax-free, the money must be used to pay qualified study abroad expenses at a college or university that's eligible to participate in federal student aid programs.

The Department of Education maintains a list of international schools (including medical schools) that participate in federal student aid programs. If you plan to use student loans to pay some of the cost of studying abroad, they'll just need to fill out the Free Application for Federal Student Aid (FAFSA) as usual.

Costs Your 529 Plan Will and Won't Cover

So what expenses can be covered? The same list of things that would be covered at your home school mentioned earlier. The more important consideration is what you cannot use 529 account money for when paying the cost of studying abroad. That list includes:

  • Travel to and from the host country or school
  • International health insurance or health care costs incurred overseas
  • An international cell phone
  • Living expenses beyond room and board as provided by the host school
  • Fees for activities and sports that aren't part of your curriculum


One other thing to note: Students must be enrolled at least half-time for a 529 plan withdrawal to count as a tax-free distribution. If you drop a course and fall below half-time, that could trigger a tax penalty.

Should You Use 529 Plan Money To Pay the Cost of Studying Abroad?

This is an important question and finding the answer starts with analyzing the cost of studying abroad. The cost largely hinges on three things:

  • The location of the host school
  • The length of your stay
  • Who's sponsoring the program

If you are enrolling in a study abroad program through your home university, you'll effectively pay the same for tuition, fees, and room and board at the host school as you would at home. If you're enrolling through the host school, however, the school determines the cost of attendance. Study abroad programs can also be sponsored by third-party companies, which charge their own fees.


If your home school comes with a significant tuition bill, and the host school is offering a much lower rate, it might make sense to reserve 529 plan money for expenses at your home school and pay for study abroad another way.

There's something else to consider if you are going through a third-party provider. You'll have to be sure the host school is qualified to participate in federal student aid programs. If it's not, you may not be able to use 529 plans as a tax-free withdrawal since third-party study abroad providers themselves don't have a federal school code. If you're paying for a third-party program with 529 money, be sure to keep detailed records of the expenses you pay in case the IRS challenges your withdrawal as non-qualified.

How To Save on the Cost of Studying Abroad

Before you set off, take time to create a budget and do the math to see if there are any opportunities to save on study abroad expenses.

For example, room and board on campus may be an option but how does that compare to the cost of living off campus? In some cities, and depending on the school, it may actually be less expensive to rent a private apartment.

Travel costs are another consideration. As soon as you know you plan to study abroad, start researching flights to their host destination. Booking early could help you snag a deal on an inexpensive flight.

If you have a travel rewards credit card, check your rewards balance to see if you have miles or points accumulated that you could use to cover the cost of their flight. One strategy that may be worth looking into if you don't have a travel rewards card is opening one well in advance of the travel date, then charging things to the card to earn an introductory points or miles bonus. You could then apply those rewards to their airfare. Just remember to pay the balance in full, otherwise, interest charges could nibble away at your savings.

Frequently Asked Questions (FAQs)

Can a 529 plan be used for study abroad?

Yes, funds from a 529 college savings plan account may be used to pay for a study-abroad program. Just be sure the program is approved by the Department of Education and that you use withdrawn funds to cover qualified education expenses (which don't include travel expenses).

What Happens If I Use 529 Funds for Expenses That Don’t Qualify?

If you withdraw 529 college savings accounts funds and use them for non-qualified education expenses, you will be liable for income tax on that amount, plus a 10% penalty. You may also be subject to taxes and penalties levied by the state in which the account is held.

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The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. University of Louisville Office of Study Abroad and International Travel. "Financing your Study Abroad Program."

  2. Securities and Exchange Commission. "An Introduction to 529 Plans."

  3. Internal Revenue Service. "Topic No. 313 Qualified Tuition Programs (QTPs)."

  4. Internal Revenue Service. "Publication 970, Tax Benefits for Education."

  5. Internal Revenue Service. "Publication 970, Tax Benefits for Education."

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