I Have a 529 Plan- But How Do I Use It?
By Ashley Hoy on September 12, 2025
Previously, Bickling Financial Services (BFS) posted about different ways to fund your child’s education. Our article can be found here: https://bickling.com/blogs/insights/funding-your-childs-education
But often, we are asked, “I have accumulated the funds in my 529 plan and now I’m ready to pay for tuition…. How do I do that?” The good news is that most 529 plans are flexible and provide many ways that payments can be made from a 529 plan. It is advised that you speak directly with your child or beneficiary’s college or university to see what their preferred method of payment is.
The first option is that the account owner can take a withdrawal from the 529 plan and have the funds sent to their bank account or to have a check mailed to their address of record. Once the account owner receives the funds from the withdrawal, the account owner can then make the payment to the school. Oftentimes, colleges and universities will accept payment electronically through their website, an intermediary or will accept a personal check by mail. It’s important to note that if this is how payment is made to the school, it is important to keep copies of checks or payment confirmations. In the event of an audit by the IRS, it’s crucial to keep proper documentation proving that the withdrawal was used for qualified expenses.
The second, and preferred option, is to have the 529 custodian send the proceeds directly to the college or university from the 529 plan. The account owner can usually make this request by calling the 529 custodian or completing a form. The account owner will generally need the following information for the beneficiary:
- Student ID number
- Bursar’s address for payments
- Amount needed for the payment
It’s always best to call the 529 plan custodian to reconfirm what information they will require to mail a payment directly to the school. Be mindful when making these requests, as the 529 custodians will often send payment by mail- and an additional fee can apply when requesting funds are sent via overnight or certified mail. Be aware of the school’s deadline for tuition payments.
But what if my child graduated and I still have money in the account? Can I still use the available balance?
The great news is that the account owner has flexibility, even if the child has graduated. If the child is intending on attending graduate school, the funds can be used to help offset those costs. If the child is working and has earned income, 529 funds can now be transferred to a Roth IRA in the child’s name- up to the annual contribution limit. In 2025, this amount is $7,000 for those under age 50. If the account owner has other children or relatives that they want to use the funds for, a beneficiary change request can be made, so that the funds are transferred to another child or person for their benefit.
Have more questions or want to know more? Please call Bickling Financial Services at 781-862-9792 and talk with one of our advisors today!
