Consider whether this savings account can help cover your international education costs.
While in school, many students take the opportunity to study abroad in a foreign country. 529 accounts can be used to fund some expenses when studying abroad, but there are two main considerations to keep in mind:
- Is the institution eligible?
- What expenses are being paid?
In order to use the assets in a 529 account for qualified study abroad expenses, the expenses must be associated with the attendance of an eligible institution. Often, study abroad costs are paid to U.S.-based schools that run the programs, but there are also over 400 schools outside of the U.S. that are considered eligible. You can look up eligible institutions by using the “School Code Search” on the Department of Education’s Federal Student Aid website. Note that you may need to choose “Foreign Country” as the state.
When outside of the United States, 529 dollars are still limited to the same qualified higher education expenses as assets being used at a domestic school. Many schools charge an overall fee for the study abroad program but can provide an itemized breakdown of the total cost. Qualified expenses include tuition, fees, books, supplies, computers and equipment required for the enrollment or attendance of the beneficiary. Room and board is also often included if the student is enrolled at least half time – an allowance determined by the school in question. Notably missing from this list are travel expenses, meaning you can’t use 529 funds to pay for plane or train tickets travelling to and from your destination. For full details on qualified expenses, refer to the IRS’s Tax Benefits for Education publication.