Room and board definition11/29/2023 ![]() ![]() Things are very simple when it comes to paying for on-campus housing. Not enrolled simultaneously in an elementary or secondary school (therefore students in dual enrollment programs are ineligible)Ī parent cannot use a 529 plan distribution to pay the mortgage on a house or condo in which the student lives, but parents may be able to charge the student rent on this home.This does not include continuing education. Enrolled in a degree or certificate program, or seeking another recognized credential.Enrolled at an eligible institution, that is, a college or university that is eligible for Title IV federal student aid, and the expenses must be incurred during this period of enrollment.To qualify to use a 529 plan distribution to pay for room and board expenses, the student needs to be: Criteria for Expenses to Qualify as Room and Board This typically includes housing costs and a meal plan. If the student is living on-campus, their qualified room and board costs will be equal to the actual invoice amount they are charged for housing owned or operated by the college. Paying for Room and Board With a 529 plan If funds are used for non-qualified purchases, the earnings portion of the distribution will incur ordinary income tax plus a 10% penalty. You can use money in a 529 savings plan to make student loan payments. ![]() With a 529 college savings plan, investments grow tax-deferred and are not taxed when withdrawn to pay for qualified higher education expenses, including tuition, fees, textbooks, supplies and equipment required for enrollment, special needs services and, in some cases, room and board costs. Parents can save for future room and board costs with a tax-advantaged 529 plan. If costs continue to rise at an annual rate of 3%, total room and board over four years at public and private colleges may cost $84,000 and $96,000, respectively. How Much Room and Board Can CostĪccording to the College Board, average room and board costs for the 2022-23 school year were around $12,310 for public 4-year colleges (in-state or out-of-state) and $14,030 for private 4-year colleges, up about 3% from the previous year. Some colleges have a fourth category that includes students who live on a military base or who receive the basic allowance for housing (BAH), which includes room and covers board only. We cover how to use your plan to pay for room and board below. Room and board include the cost of housing and the cost of a meal plan.Ĭolleges typically have room and board budgets for students who live on campus in college-owned or operated housing, for students who pay rent to live off-campus in an apartment, and for students who live off campus with their parents or other relatives. You can use a 529 plan to pay for room and board, but only if certain requirements are met. Room and board costs make up a large portion of a student’s total college bill, second only to tuition. ![]()
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