Can You Use 529 for Study Abroad: Eligible Schools, Costs, Records

You can use a 529 plan for study abroad, and the earnings stay tax-free, as long as the foreign school participates in a federal student aid program run by the U.S. Department of Education. The rule turns on the school’s participation status, not on where the campus sits. Qualified expenses at that school follow the same federal definitions as at a domestic college: tuition, required fees, books and equipment, capped room and board, and computers used during enrollment. Travel to and from the country does not qualify.

Confirming the Foreign School Qualifies

An international school is an eligible educational institution for 529 purposes if it participates in a federal student aid program administered by the U.S. Department of Education.¹ IRS Publication 970 confirms that certain schools located outside the United States meet this standard.² The fastest way to check a specific institution is to look up its Federal School Code on the Federal Student Aid website.³ The Department of Education also publishes a list of foreign schools participating in the federal loan programs.⁴ Status can change from year to year, so confirm before you commit.

How you enroll matters too. If you go abroad through your U.S. college’s own study-abroad program, the domestic school is the eligible institution and handles the billing; your 529 pays that school as it normally would. If you enroll directly at a foreign university, that university has to hold its own Federal School Code for the withdrawal to be tax-free. Direct-enrollment students should verify the code before wiring tuition.

What the 529 Covers Abroad

Federal law defines qualified higher education expenses as tuition, fees, books, supplies, and equipment required for enrollment or attendance at an eligible institution.⁵ For a semester or degree overseas, that means the base tuition charged by the foreign school, mandatory student fees, required textbooks, and course-specific lab or equipment fees the school imposes.

Computers and internet service have their own rule. A 529 can pay for computer equipment, peripheral devices, software, and internet access as long as the student uses them primarily during the years of enrollment.⁶ The school does not have to require the computer. Games and entertainment software are excluded unless they are predominantly educational.

Room and board are covered with two conditions. The student has to be enrolled at least half-time in a degree or credential program, and the withdrawal cannot exceed the school’s cost-of-attendance allowance for room and board.⁵ For university housing, the actual amount the school charges applies. For an off-campus flat, the withdrawal has to stay within the school’s official room and board figure used for financial aid. Ask the international institution for that number in writing before you calculate your distribution.

What the 529 Will Not Cover

Travel is the biggest gap. Getting to and moving around the host country is on you:

Airfare, including connecting flights.
Local transit, taxis, and car rentals.
International health insurance or travel insurance, unless the school lists it as a mandatory fee charged to all students.
Student visa application fees and SEVIS fees.⁶
Cell phone plans, toiletries, clothing, and weekend trips.

Where the foreign school bundles insurance or specific charges into a single mandatory fee billed to every student, that bundled charge can count as a qualified fee. Confirm with the institution that the charge is truly mandatory and appears on its official billing statement.

Paying the School and Handling Foreign Currency

Most 529 plans let you request a distribution online or by paper form. You can direct the payment to yourself as account owner, to the student, or to the school. Wiring funds directly from a 529 plan to a foreign university is not always supported. A common workaround is to pay the school first by international wire or credit card and then request a 529 distribution to reimburse yourself or the student, keeping the reimbursement in the same tax year as the expense so the amounts line up on the return. Processing a distribution takes several business days, and international transfers add more time, so submit the request well before the school’s tuition deadline.

Tuition billed in euros, pounds, or another foreign currency has to be converted to U.S. dollars for tax purposes. The IRS uses the exchange rate on the date you actually pay or accrue the expense, not the date you request the distribution or the date on the invoice.⁷ Acceptable rate sources include banks, the U.S. Treasury Department’s published rates, the Federal Reserve, and widely used commercial rate providers. Save a screenshot or printout of the rate on the payment date with the receipt.

Records to Keep Without a 1098-T

Domestic colleges send Form 1098-T each year, but foreign schools generally do not file it. You can still claim tax-free treatment on the 529 distribution as long as you can prove enrollment at an eligible school and substantiate the expenses.⁸ Keep:

An official enrollment letter or transcript showing the academic period and whether the student is at least half-time.
Itemized invoices breaking out tuition, mandatory fees, and school-managed housing.
Bank statements, wire confirmations, or card records showing date, amount, and recipient of each payment.
The school’s published cost-of-attendance figure for room and board, if you are covering off-campus housing.
Exchange rate documentation for each payment date.

Hold these records for at least three years from the date you file the return covering the distribution.²

When a Withdrawal Does Not Qualify

If you use 529 money for something outside the qualified list, only the earnings portion of that withdrawal is penalized. The earnings are taxed as ordinary income at your federal rate, plus a 10 percent additional tax.⁵ Your original contributions come out untouched.

The 10 percent additional tax is waived in a few specific situations. If the student receives a tax-free scholarship or fellowship, you can withdraw up to the scholarship amount without the 10 percent (ordinary income tax on the earnings still applies). The penalty is also waived if the beneficiary dies, becomes disabled, or attends a U.S. military academy.

State taxes are a separate layer. Most states that gave you an income tax deduction or credit for 529 contributions will recapture that benefit on a non-qualified distribution, meaning you may owe back part of the state tax savings you previously received. Factor that into any decision to pull funds for an expense you are not sure about.

If the School Issues a Refund

Study-abroad plans change. A canceled course, a withdrawal, or a reduced bill leaves part of your earlier 529 distribution no longer matched to a qualified cost. You have 60 days from the date you receive the refund to recontribute that amount to a 529 plan for the same beneficiary.⁹ A timely recontribution is treated entirely as principal, and it does not count against the plan’s lifetime contribution limit.

It does not have to be the same 529 plan that made the original distribution, as long as the student is the beneficiary. Miss the window and the refunded amount becomes a non-qualified distribution, subject to income tax and the 10 percent additional tax on the earnings.¹⁰ Foreign refunds and international bank timing can eat into the 60 days, so start the recontribution as soon as the funds arrive.

Coordinating With Education Tax Credits

You can claim the American Opportunity Tax Credit or the Lifetime Learning Credit in the same year you take a tax-free 529 distribution, but the same dollar of tuition cannot be used for both.² Double-counting turns part of the 529 withdrawal into a taxable distribution.

The American Opportunity Credit is worth up to $2,500 per eligible student and phases out for single filers with modified adjusted gross income above $80,000 ($160,000 for joint filers).¹¹ Families who qualify often pay the first $4,000 of tuition from outside the 529 to capture the full credit, then use 529 funds for the rest.

To stay on the right side of the rule, first reduce total qualified education expenses by any tax-free scholarships, grants, or employer tuition benefits. Then subtract the expenses you used to figure the credit. The remainder is what you can safely cover with a tax-free 529 distribution.²

Leftover 529 Funds After Study Abroad

If the student wraps up the program with money still in the account, the SECURE 2.0 Act allows a rollover of unused 529 funds into a Roth IRA in the beneficiary’s name, without income tax or the 10 percent additional tax. This option has been available since January 1, 2024.⁵ The main rules:

The 529 account has to have been open at least 15 years for the current beneficiary.
Total lifetime rollovers cannot exceed $35,000 per beneficiary.
Each year’s rollover is capped at the Roth IRA annual contribution limit ($7,500 for 2026 for most people under 50) minus any regular Roth contributions the beneficiary made that year.
Contributions made within the five years before the rollover, and their earnings, are not eligible.
The transfer has to go directly from the 529 plan trustee to the Roth IRA trustee.

At the annual limit, hitting the $35,000 cap takes at least five years of maximum rollovers. For families who funded a 529 conservatively expecting a longer program, or whose student picked up a scholarship, the option converts an overfunded balance into retirement savings instead of a penalized withdrawal.

1
Internal Revenue Service. Eligible Educational Institution
2
Internal Revenue Service. Publication 970 (2025), Tax Benefits for Education
3
Federal Student Aid. Select Colleges and Career Schools
4
Department of Education. International Schools Participating in the Federal Student Loan Programs
5
Office of the Law Revision Counsel. 26 USC 529 – Qualified Tuition Programs
6
Internal Revenue Service. 529 Plans: Questions and Answers
7
Internal Revenue Service. Foreign Currency and Currency Exchange Rates
8
Internal Revenue Service. Education Credits: Questions and Answers
9
IRS.gov. Guidance on Recontributions, Rollovers and Qualified Higher Education Expenses Under Section 529 Notice 2018-58
10
IRS. 1099-Q What Do I Do?
11
Internal Revenue Service. American Opportunity Tax Credit