Frequently Asked Questions
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Withdrawals
3. What if my grandchild is awarded a scholarship and doesn't need the money that I have put in the 529 account?
     

There is no penalty for withdrawal of money up to the amount of the scholarship. The remainder can be left in the account for costs not covered by the scholarship. Or you may change the beneficiary to another member of the original beneficiary's family, including a cousin.  If the beneficiary becomes disabled or dies, there is no penalty for withdrawal of funds. Withdrawals that are not used for a "qualified" education expense will be regarded as regular income.  Since the money going into the 529 plan has been taxed, only the gain is taxed when a non-qualified withdrawal is taken.
 
1. How do I withdraw monies in payment for college?
2. May the 529 funds be used to purchase a computer?
4. What happens to the balance if my child graduates from college and has money left over in his/her 529 account?
5. Is there a minimum time period during which the account must be held before monies can be withdrawn?
Still Need Help? Ask An Expert

Do you want guidance in selecting a 529 plan?  Click the Contact Us button below and speak to a live advisor, or drop us an email and we will be pleased to assist you. If you are a do-it-yourself person, click the Professor for his assistance in sorting and ranking plans or click on the National Map to locate a specific state's 529 program.

 

 

 

 
 
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