How Can a WA529 College Savings Plan Be Used? Let Us Count the Ways!

By: Sarah Bahn (Estimated reading time: 3 minutes)

A child sitting at a desk writing in a notebook.

With the cost of higher education these days, many parents start thinking about saving for their children’s college expenses before they’ve even finished paying for diapers! Of course, when your baby is brand new to the world, it may feel impossible to predict if, when, or where they’ll pursue higher education. Though opening a college savings plan through programs like the Washington 529 College Savings Plans (WA529) might seem like a big commitment when you don’t know whether your child will use it or not, parents can rest assured that despite being commonly referred to as “College Savings Plans,” the WA529 plans can be used for a variety of education expenses.  

529 plans are tax-advantaged college savings accounts designed to encourage saving for future educational expenses. The Washington State-sponsored 529 plans include DreamAhead, an investment-based 529 plan that allows families to select an investment option to grow their education savings, and the Guaranteed Education Tuition (GET) Program, a prepaid 529 plan that allows families to purchase tuition units at a set price to use in the future, avoiding tuition inflation and stock market risk.  


So, what exactly can your 529 savings be used to pay for?  

College or University Expenses 

The most well-known use of 529 plan savings is for college expenses. Qualified expenses related to college include tuition and fees, books, learning materials (like a laptop), room and board at a college (you can even get off-campus housing costs covered based on a “cost of attendance” figure provided by the college).  

Trade School Expenses 

If your child chooses to pursue a trade school education, 529 plan savings can be used for a variety of qualified education expenses at trade schools and apprenticeship programs.  

K-12 Education Expenses 

Even before college, 529 savings can be used to cover up to $10,000 per year in tuition expenses for K-12 schools.  

Student Loans 

529 savings can be used to pay for qualified education loans, with a lifetime maximum of $10,000 for a beneficiary or a sibling of the beneficiary.  

Other Family Members’ Expenses 

If the original beneficiary of the 529 plan does not use all (or any) of the money saved, the beneficiary can be changed to another family member with no penalty to be used on their qualified education expenses. This means 529 funds saved for one child could be used for another child or even a parent’s student loans or other educational expenses.  

Last Resort: Withdraw the Funds 

If no one in your family has educational expenses that can be paid for using 529 plan savings, the money doesn’t go to waste! Funds from a 529 plan can be withdrawn to be used for non-educational expenses, though the earnings will be taxable and subject to a 10% federal penalty fee. The penalty does not apply in cases when the beneficiary has died or become disabled, received a scholarship to an eligible education institution (withdrawal amount cannot exceed the scholarship amount), or enrolled in an eligible US service academy.  


Even if you want to keep options open for your child’s future, the money you save now for a 529 plan can go to good use down the road for a variety of potential expenses. Want to learn more? Join us on Wednesday, April 27, 2022 for an interactive presentation and conversation with our friends from WA529! Register for this FREE event and save your seat today.  

About the Author
About the Author

Sarah Bahn (she/her) is the Communications and Marketing Coordinator at PEPS. She loves amplifying the incredible stories of the PEPS community through the PEPS blog, website, and social media. Sarah is passionate about the community-building power of nonprofits and loves to support our local organizations. In her free time, she enjoys taking long walks through Seattle neighborhoods and parks with a coffee in hand.

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