That’s more of a question for your 529 plan provider. From a tax perspective, the logistics don’t really matter. I’ve found over the years that about 2/3 of families pay the college then pull the funds out of the 529 plan to reimburse their expenses. The other 1/3 pay the school directly.

You can consider the full program fee a qualifying expense if paid to her US-school. Anything they pay themselves, including transportation and insurance, is not qualifying. Food is “iffy”, because you likely don’t have a true cost of attendance, so I wouldn’t count it.

I am wondering your thoughts on my situation.

My daughter got accepted into a 3-week program led by faculty through her accredited US college. They go to England for 3 weeks to earn 6 credits. She is billed a “program fee” of $5,000 that covers tuition, room and field trips. Students buy their own food and pay for airfare. They also require $200 of travel insurance.

If she took a 3-week course on campus in the US, the cost of attendance for 6 hours of tuition, room and meal plan is $2,700.

Does this mean that only the $2,700 can come out of the 529 plan tax free or can I take out the full $5,000 tax free as that is the program fee? What about the $200 required insurance plan?

THANK YOU!
Michelle

You can always use the funds, but for the distribution to be qualified and tax-free, your school needs to be on the FSA list linked in the article.