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While parents and students alike hope for smooth sailing after college drop-off day, the initial days, weeks, and even months for first-time college students can be a bit challenging in a variety of ways.

First-year students may express specific concerns, for instance, about the quality of food or residence halls, the workload in certain classes, roommate compatibility, or just garden variety homesickness. Some students may also express a complete change of heart with respect to the type of school they selected, and/or its location and size.

The most common advice for parents seems to be to take a deep breath, lend a supportive ear, and resist the urge to jump in and attempt to rescue their first-time college student from the quite natural adjustment discomfort they are experiencing. Professionals advise parents to show confidence in their children by encouraging them to think through and identify steps they can take on their own, or with the support of campus resources, to address and improve their situation.

While in all likelihood everything will work out in time, it is helpful for parents and others who have invested in a 529 college savings program to recognize just how flexible their investment can be should a change in direction be truly warranted.

529 plans are flexible with respect to:

  1. Living Arrangements: Should your child need to adjust their current living arrangement from a double to a single room or suite, or to a quieter dorm floor or location on campus, for example, remember that 529 plans can be used to cover room and board expenses, in a wide variety of forms, when attending eligible schools at least half-time. In addition to covering the cost of living on campus and utilizing campus food services, costs associated with living off campus and at home are covered expenses as well, up to their actual cost or the institution’s published cost of attendance allowance for room and board, whichever is less.
  2. Types of Institutions: Whether a transfer to a community college, a trade or vocational school, another 4-year institution, or some other form of higher education is desired for the next semester or academic year, you can count on your 529 plan to help cover the cost of tuition and other required expenses at any eligible post-secondary educational institution. These include most accredited public, nonprofit and privately-owned–for-profit postsecondary institutions eligible to participate in a student aid program run by the U.S. Department of Education. To see which U.S. and international schools have Federal School Codes—an identification number used with federal financial aid program-eligible schools—check the U.S. Department of Education’s website or contact a particular school directly to determine if it qualifies as an eligible educational institution.
  3. Location of Institutions: Whether your child decides to transfer to an in-state or out-of-state school or to travel across the country or the world to pursue a different type of educational experience than originally planned, you can count on your 529 college savings plan to help cover the expenses required for attendance at eligible institutions regardless of location.
  4. School Refunds: Should your child drop a class or decide to withdraw altogether, keep in mind that any refund received from the school for an amount previously withdrawn from your 529 account to cover qualified expenses can be re-deposited into a 529 account for the same beneficiary within 60 days of receipt of refund without being subject to federal and/or possibly state tax. A tax advisor can help you to determine how best to proceed in these circumstances.
  5. Timeframe for the Use of Funds: If a decision is made to hit the pause button altogether, to rethink the desired direction, or pursue a gap year experience or something else, you can count on your 529 college savings plan to be there for use when the time is right to resume higher education. There are generally no time limits on how long funds can remain invested in a 529 college savings account.


The early days, weeks, and even months of college can be stressful for students and their families. If a slight or full change in direction is ultimately needed, remember that the change may lead to a much more rewarding educational experience than the route initially pursued. After all, there’s no one path to a fulfilling future.


Patricia A. Roberts is a motivational speaker, writer, and veteran of the college savings industry. She has led college savings initiatives at premier financial services organizations like Merrill Lynch and AllianceBernstein, and has authored Route 529: A Parent’s Guide to Saving for College and Career Training with 529 Plans. In her current role as COO at Gift of College, she promotes 529 plans as a financial wellness benefit in the workplace.