I attend university in the United Kingdom but have a 529 college savings plan in the United States. As I understand it, money from this plan can be used to cover my off-campus housing expenses.

However, the amount cannot be greater than:

The actual amount charged if the student is residing in housing owned or operated by the eligible educational institution.

This seems to be straightforward for those attending US-based universities, where students generally pay a fixed price for dorms (or where the prices vary by only small amounts). However, my university offers a prodigiously large variety of accommodation arrangements, ranging from situations where 3 students live in stacked beds in a single room, all the way up to studios that cost two thousand pounds per month.

Am I only able to apply the cost of the cheapest available housing option to my off-campus rent, or could I apply the cost of an equal housing situation offered by the university to my off-campus rent?

  • To clarify, is your "off-campus rent" for "housing owned or operated" that university? Or for a separate, independently-owned place that happens to be nearby?
    – Kevin
    Commented Jan 31, 2018 at 21:01
  • The off-campus rent is for separate and independently owned accommodation nearby.
    – JosephG
    Commented Feb 1, 2018 at 10:17

2 Answers 2


You misunderstand the eligibility criteria. The quotation you linked is actually the second part, from publication 970:

a. The allowance for room and board, as determined by the school, that was included in the cost of attendance (for federal financial aid purposes) for a particular academic period and living arrangement of the student.

b. The actual amount charged if the student is residing in housing owned or operated by the school.

b. is saying that you can only subtract the actual amount paid for on-campus housing, not that this has any bearing on your rent off-campus: note the sentence construction - "You can deduct an amount that is no greater than the actual amount charged, if the student is residing on-campus". b. only applies if you are living on-campus.

a. on the other hand is what is relevant: schools are expected to define what an acceptable allowance is for financial aid purposes (as someone with any of various forms of federal financial aid, including stafford/perkins loans, is only able to accept aid up to that amount). You should contact your institution and find out if they can provide that amount. If they cannot, it's possible that the school is not eligible for the 529 program at all - not all overseas schools are. See further up in publication 970:

An eligible educational institution also includes certain educational institutions located outside the United States that are eligible to participate in a student aid program administered by the U.S. Department of Education.


One perspective you could take when facing questions such as this one is "If I am audited by the IRS, will this expense be considered reasonable and justifiable?"

Given the circumstances you describe, if you can point to the university housing and state "About half of the on-campus options which were available were more expensive than my off-campus housing rates" then I'd say you're on solid ground.

If on the other hand, you have to point to an exceptional circumstance (such as an unusually expensive on-campus option) and then state "My housing was only 10% more expensive than this option", I'd say you're on less stable ground.

  • 2
    I don't see your justification. Where does the IRS say, "if there are multiple tiers, the max you can apply from a 529 plan is the median cost"?
    – RonJohn
    Commented Jan 31, 2018 at 18:02
  • While it is clear that I cannot apply funds in excess of the most expensive on-campus option, determining the median cost is not straightforward. While there are published stats regarding the number of available rooms and the total number of rooms, there are no stats regarding how many rooms of a given tier are actually occupied for a full year. Some are damaged, others are being renovated, and even more are booked by students on exchange programs or short-term courses. They come on and off the market. There is no reliable way to say X rooms of tier Y are booked on an annual basis.
    – JosephG
    Commented Jan 31, 2018 at 18:29
  • Furthermore, I am not sure that merely measuring rooms regardless of booking status would be an accurate metric for median cost either. There are far more rooms with stacked beds than studios due to spacing constraints, but many of the lowest quality rooms are often left unbooked for substantial portions of the year.
    – JosephG
    Commented Jan 31, 2018 at 18:30
  • The amount allowable for room and board costs is available from the school's financial aid or admissions office, and it can also often be found online. The IRS's guidance in pub970 bases all limits on this amount, assuming that it is provided (international schools might vary in what information they track). My statement is based on your assertion that the school doesn't provide this information and the range varies widely, that your safest bet is to stick to middle of the range (the school can definitely provide data here) so that when you get audited you have reasonable justification. Commented Jan 31, 2018 at 18:50
  • Thanks! I will see if they will provide a middle range number. Are there any IRS guidelines that suggest that either the median or mean number are acceptable (I have failed to find any), or is this merely an assumption based on experience? The difference in pricing from the cheapest to most expensive accomodation option is about 1400 pounds (~$2,000) per month.
    – JosephG
    Commented Jan 31, 2018 at 18:57

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