Yes, a 529 plan can be used for foreign universities, as long as the school participates in the U.S. Department of Education’s federal student aid program under Title IV of the Higher Education Act. Several hundred international institutions across Canada, the United Kingdom, Australia, France, Germany, Israel, and other countries currently hold that status. The eligibility test is the same one used for domestic colleges, so once you confirm the school is on the federal list, qualified withdrawals work the way they always have.
Which Foreign Schools Qualify
A foreign university is an eligible educational institution for 529 purposes if it has signed a program participation agreement with the U.S. Department of Education and is eligible to take part in Title IV federal student aid.1Internal Revenue Service. Publication 970 (2025), Tax Benefits for Education That single test governs whether tax-free distributions are permitted.2Internal Revenue Service. Eligible Educational Institution
Not every well-regarded international school participates. Some decline the administrative load of U.S. reporting; others have let their agreements lapse. Reputation is not the test, and the list changes, so confirm current status before you request a distribution.
How to Verify a School’s Eligibility
The U.S. Department of Education publishes a Federal School Code List covering every Title IV institution, domestic and foreign.3Department of Education FSA Knowledge Center. Federal School Code Lists You can search it at fsapartners.ed.gov by name or country. Each eligible school has a six-digit federal school code, sometimes called an OPE ID, and your 529 plan administrator will typically ask for it on the distribution form.
If a school does not appear, contact its international admissions office. Some institutions participate under a different legal name or through an affiliated entity, which makes name searches unreliable. Without a valid school code, the plan administrator cannot process the payment as a qualified withdrawal.
Study Abroad Through a U.S. College vs. Direct Enrollment
The verification path depends on who your student is actually enrolled with. In a study abroad program sponsored by a U.S. university, the student stays enrolled at the U.S. school and pays tuition through it. The U.S. institution’s own eligibility covers the term abroad, and the 529 distribution goes to the U.S. school like any other semester.
Direct enrollment is different. If your student is pursuing a full degree at a Canadian, British, or other foreign university, that foreign school is the one that must appear on the Federal School Code List, and payment flows to the foreign institution. The qualified-expense rules are identical either way; only the payee and the verification target change.
Qualified Expenses at a Foreign University
Federal law defines qualified higher education expenses as tuition, required fees, books, supplies, and equipment required for enrollment or attendance.4Office of the Law Revision Counsel. 26 U.S. Code 529 – Qualified Tuition Programs Mandatory laboratory fees, student activity fees, and required course materials listed in the school’s catalog or syllabus count.
Computers, peripherals, software, and internet access also qualify, provided the beneficiary uses them primarily while enrolled at an eligible institution.5Internal Revenue Service. 529 Plans: Questions and Answers Software mainly for games, sports, or hobbies does not, unless it is predominantly educational.
Room and Board
Room and board is qualified only when the student is enrolled at least half-time under the school’s own standards.1Internal Revenue Service. Publication 970 (2025), Tax Benefits for Education The qualified amount is capped at the greater of two figures: the room and board allowance the school includes in its published cost of attendance, or the actual amount the school charges for its own housing.
Students living off-campus face the same cap. Get the school’s published cost of attendance figure for off-campus living and keep your 529 withdrawal at or below it. Many foreign universities post these numbers on their financial aid or international student pages; if not, email the finance office. When the school publishes its figure in a foreign currency, plan for the conversion.
What 529 Funds Cannot Cover Abroad
Studying overseas involves costs domestic students rarely see, and most of them fall outside the qualified-expense definition. International airfare, student visa application fees, passport costs, mandatory health insurance, and international phone plans are treated as personal expenses under IRS rules, even when the university or immigration authorities require them.1Internal Revenue Service. Publication 970 (2025), Tax Benefits for Education
Wire transfer fees and currency conversion charges from your bank are also not qualified. Those costs mount quickly when paying tuition overseas, so budget for them from personal funds. Using 529 money for any of these items converts that portion into a non-qualified distribution.
Handling Currency Exchange
When a foreign university bills in euros, pounds, or another currency, you need dollar amounts for tax reporting. The IRS does not require a specific exchange rate; it accepts any posted rate used consistently and recommends the spot rate on the date of payment.6Internal Revenue Service. Yearly Average Currency Exchange Rates The IRS yearly average rates published on irs.gov are another acceptable method.
Whichever rate you use, document it. Save a screenshot of the rate on the payment date, keep the bank or wire confirmation showing the converted amount, and match it to the 529 distribution. If the dollar weakens between withdrawal and payment, you may need to cover the shortfall from personal funds; that gap is not a qualified expense.
Coordinating With Education Tax Credits
Tuition paid to an eligible foreign university can also count toward the American Opportunity Tax Credit, worth up to $2,500 per year based on the first $4,000 of qualified expenses during each of the student’s first four years of higher education.7Internal Revenue Service. American Opportunity Tax Credit The full credit requires modified adjusted gross income of $80,000 or less, or $160,000 or less if married filing jointly. The Title IV eligibility that makes a school work for 529 purposes also makes it work for the AOTC.
You cannot use the same dollars for both benefits. If you claim the credit for $4,000 in tuition, that same $4,000 cannot count when calculating whether your 529 distribution is tax-free.8Internal Revenue Service. Instructions for Form 8863 A common approach is to pay enough tuition out of pocket to capture the credit and use the 529 for the remaining qualified expenses. Getting this wrong turns part of your distribution into taxable income.
One wrinkle: the AOTC ordinarily requires Form 1098-T, which foreign universities are not always required to issue. Without one, you can still claim the credit by proving enrollment at an eligible institution and substantiating the payments yourself.7Internal Revenue Service. American Opportunity Tax Credit
What Happens If a Withdrawal Isn’t Qualified
If 529 funds go to anything other than qualified expenses at an eligible institution, the earnings portion of that distribution is subject to federal income tax plus a 10 percent additional tax.4Office of the Law Revision Counsel. 26 U.S. Code 529 – Qualified Tuition Programs Your original contributions are not taxed again, since they were made with after-tax dollars, but the growth is hit with both.
The trap doors show up more often abroad than people expect. A student drops below half-time and the room and board portion becomes non-qualified. A school loses its Title IV status mid-year. A parent covers visa fees from the 529 without realizing they are personal expenses. Each of those turns some earnings taxable.
Records and Tax Reporting
After year-end, the 529 plan administrator issues IRS Form 1099-Q showing the gross distribution and splitting it into contributions (basis) and earnings.9Internal Revenue Service. Form 1099-Q (Rev. April 2025) Payments From Qualified Education Programs The form goes to whoever received the payment. If you had the plan pay the beneficiary, the student gets the 1099-Q; if you had it paid to yourself as account owner, you receive it.
The IRS does not automatically know whether a distribution was qualified. That burden is on you. Keep tuition invoices, receipts for books and equipment, the school’s published cost of attendance for room and board, and proof of enrollment status. For foreign schools, hold on to the exchange rate documentation and a record of the school’s federal school code at the time of the distribution.1Internal Revenue Service. Publication 970 (2025), Tax Benefits for Education
The distribution request form itself will ask for the university’s official name, foreign address, federal school code, and the student’s ID number. You can direct the payment to yourself, the student, or the school. Paying the school or the beneficiary can simplify reporting, though international payments may add processing time and fees the plan administrator cannot control.
If You End Up With Leftover 529 Money
Starting in 2024, the SECURE 2.0 Act allows unused 529 funds to be rolled into a Roth IRA for the beneficiary. This matters for families using 529s abroad, because international degrees sometimes cost less than projected or a student finishes with a balance still in the account. The lifetime rollover cap is $35,000 per beneficiary, and the 529 must have been open for at least 15 years.4Office of the Law Revision Counsel. 26 U.S. Code 529 – Qualified Tuition Programs
Each year’s rollover cannot exceed the annual Roth IRA contribution limit, contributions made to the 529 within the most recent five years are not eligible, and the beneficiary of the 529 must be the owner of the Roth IRA receiving the funds. It is not a quick fix for overfunding, but it gives long-standing accounts an exit ramp that avoids the 10 percent penalty on earnings.
State Tax Considerations
Federal rules decide whether a 529 distribution is tax-free, but state treatment can differ. Many states offer an income tax deduction or credit for contributions, and most mirror the federal rule that qualified distributions are tax-free at the state level. A handful may recapture previously claimed state deductions when funds are used at an out-of-state or foreign institution. Rules vary, so check your state’s 529 plan documentation or your state’s department of revenue before withdrawing for a foreign school.