Can You Use a 529 Plan to Pay for SAT Prep?

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Kathryn Flynn

By Kathryn Flynn

January 22, 2020

Students may not use a 529 college savings plan to pay for college test prep, including SAT prep. 529 plan distributions used to pay for SAT prep are considered non-qualified and subject to income tax and a 10% penalty on the earnings portion of the distribution. Any state income tax benefits previously claimed may also be subject to recapture. 

Qualified 529 plan expenses for college include tuition, fees, books, supplies and equipment required for the enrollment or attendance of a designated beneficiary at an eligible education institution. Even if a college requires the SAT or ACT for admission, the standardized tests are not required for enrollment or attendance. SAT prep courses are paid before a student is accepted into a college and are not required for college enrollment or attendance.

SAT prep courses are generally taken while a student is in high school, however the cost of SAT test prep is not considered a qualified K-12 expense for 529 plans. Qualified K-12 expenses are limited to tuition in connection with enrollment or attendance (up to $10,000 per beneficiary, per year).

Is the SAT required for college admissions?

Not every college requires prospective students to take the SAT. Most colleges require either the SAT or ACT, but about 40% of accredited colleges and universities do not have an admissions requirement for standardized test scores.

The number of “test optional” colleges has been on the rise in recent years. Some colleges believe that standardized test scores are not an accurate predictor of college success and admitting students based on SAT and ACT scores hurts diversity. The University of Chicago was the first large, highly selective college to become test-optional and many colleges are expected to follow this trend.

Studies have shown that students from high income families tend to score higher than students who are less well-off. There have even been cases, such as the Varsity Blues scandal, where affluent parents bribed test proctors to alter test results to help their children gain admission into selective colleges.

Before signing up for an SAT test prep course, students should check with the colleges they are applying to and see which (if any) standardized tests are required for admission.

How much do SAT prep courses cost?

Costs of SAT prep courses vary, depending on the type of course and the company that offers the course. Some of the most popular SAT prep courses include: 

  • Peterson’s – Online SAT test prep subscriptions for $39 a month.
  • College Prep Genius – One-year memberships cost $139 for a fundamental SAT eCourse and $189 for a comprehensive SAT eCourse
  • Magoosh – Online SAT test prep subscriptions range from $99 a month to $179 for a year. 
  • Prep Expert (formerly 2400 Expert) – Prices range from an online weekend review course for $299 to an onsite 6-week flagship course for $1199.
  • Princeton Review – Students can select courses ranging from $749 to $1999, or private tutoring starting at $150 an hour.
  • Kaplan Test Prep – An on-demand course is available for $99, or students may select a live course (starting at $599) or one-on-one tutoring sessions (starting at $1999).

But, expensive classes and tutoring aren’t the only ways for a student to prepare for the SAT. There are also websites and apps that offer free SAT prep materials, including those from Kahn Academy and the College Board.

Will taking an SAT prep course help your score?

Preparing for the SAT can help students achieve a higher score, even if that simply means taking practice tests. A slight improvement in a student’s results can make a big difference if the college they are applying to has a cutoff for admissions test scores.

Before spending money on an expensive SAT prep course, students should consider utilizing free materials available online. Students who are not self-disciplined and would benefit from a structured course can explore options that offer a money-back guarantee. If a student scores high enough on their initial attempt at the SAT, a prep course or individual tutoring might not be necessary to try and improve scores.


At, our goal is to help you make smart decisions about saving and paying for education. Some of the products featured in this article are from our partners, but this doesn’t influence our evaluations. Our opinions are our own.

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