Facebook Pixel Can You Use a 529 Plan To Pay for Travel Costs?

Can You Use a 529 Plan To Pay for Travel Costs?

Written by Mark Kantrowitz | November 1, 2024

You cannot use 529 plan funds to pay for travel and transportation costs. This applies to all travel and transportation costs, including transportation to and from the college, such as car payments, repairs, and gasoline. Travel for international study and study abroad programs, such as flights, train tickets, and taxis, are also not considered 529 eligible expenses.

If 529 plan withdrawals are used for these transportation expenses, they will be considered non-qualified expenses that don’t allow using 529 plan funds to cover the costs. The earnings portion of a distribution from a 529 used to pay for travel and transportation expenses will be considered a non-qualified distribution.

Non-qualified distributions are taxable at the beneficiary’s rate, plus a 10% federal tax penalty and recapture of state income tax benefits attributable to the distribution.

However, there may be an exception if the university charges travel and transportation costs as part of a comprehensive tuition fee or if the fee is identified as a fee that is “required for enrollment or attendance” at the college.

What’s considered the cost of attendance?

A college’s official cost of attendance, as defined in the Higher Education Act of 1965, includes an allowance for transportation expenses.

However, the definition of qualified higher education expenses in the Internal Revenue Code of 1986 is different. It does not include transportation expenses, miscellaneous personal expenses, dependent care costs, loan and licensing fees, and room and board limited to students enrolled on at least a half-time basis.

529 qualified expenses and transportation

Qualified education expenses are limited to tuition, fees, books, supplies, equipment, special needs services, computers (including peripherals, software, and internet access), and room and board if enrolled at least half-time.

Students can ask their educational institution to increase the cost of attendance to reflect their actual travel and transportation costs. However, the family will still be unable to distribute tax-free from a 529 plan to pay for the travel expenses. Increasing the cost of attendance may enable the students and parents to borrow more federal education loans to cover the costs.

Some colleges have emergency aid funds that may cover the cost of repairs to the student’s car if the student is a low-income commuter student. But, emergency aid funds will generally not cover the cost of routine travel costs, except perhaps the cost of public transportation.

You may also be able to get grants or scholarships to cover these types of expenses. Some of these funding sources have fewer restrictions when spending the funds, so it may be possible to cover transportation expenses this way.

Was this article helpful?

About the author

Mark Kantrowitz is a nationally-recognized expert on student financial aid, scholarships and student loans. His mission is to deliver practical information, advice and tools to students and their families so they can make informed decisions about planning and paying for college. Mark writes extensively about student financial aid policy. He has testified before Congress and federal/state agencies about student aid on several occasions. Mark has been quoted in more than 10,000 newspaper and magazine articles. He has written for the New York Times, Wall Street Journal, Washington Post, Reuters, Huffington Post, U.S. News & World Report, Money Magazine, Bottom Line/Personal, Forbes, Newsweek and Time Magazine. He was named a Money Hero by Money Magazine. He is the author of five bestselling books about scholarships and financial aid, including How to Appeal for More College Financial Aid, Twisdoms about Paying for College, Filing the FAFSA and Secrets to Winning a Scholarship. Mark serves on the editorial board of the Journal of Student Financial Aid and the editorial advisory board of Bottom Line/Personal (a Boardroom, Inc. publication). He is also a member of the board of trustees of the Center for Excellence in Education. Mark previously served as a member of the board of directors of the National Scholarship Providers Association. Mark is currently Publisher of PrivateStudentLoans.guru, a web site that provides students with smart borrowing tips about private student loans. Mark has served previously as publisher of the Cappex.com, Edvisors, Fastweb and FinAid web sites. He has previously been employed at Just Research, the MIT Artificial Intelligence Laboratory, Bitstream Inc. and the Planning Research Corporation. Mark is President of Cerebly, Inc. (formerly MK Consulting, Inc.), a consulting firm focused on computer science, artificial intelligence, and statistical and policy analysis. Mark is ABD on a PhD in computer science from Carnegie Mellon University (CMU). He has Bachelor of Science degrees in mathematics and philosophy from MIT and a Master of Science degree in computer science from CMU. He is also an alumnus of the Research Science Institute program established by Admiral H. G. Rickover.

Full bio →

A good place to start:

See the best 529 plans, personalized for you

Helping families save for college since 1999
Join our email list

The latest articles and tips to help parents stay on track with saving and paying for college, delivered to your inbox every week.

Frequently featured in:

Saving For College is an unbiased, independent resource for parents and financial professionals, providing them with information and tools to understand the benefits of 529 college savings plans and how to meet the challenge of increasing college costs.

20533 Biscayne Blvd Ste 4 #199 Miami, FL 33180-1501Phone: (585) 286-5426Copyright © 2025 Saving for College, LLC. All Rights Reserved