Carrie Schwab Pomerantz
Dear Carrie: We've been saving for years in a 529 account for our son's education, but it now looks like he won't be going to college. Are there other options for using this money? -- A Reader

Dear Reader: One of the great -- and challenging -- things about having kids is that they can surprise you at every turn. While you can save diligently for their education, you can't predict what their talents or interests will be. Trust me. As a mother of three, I know from experience!

I think many of us envision a four-year college for our kids but that's only one of a myriad of choices, especially today. So does that mean a 529 account is no longer a good idea? Absolutely not. Because while a 529 is called a "college savings account," it probably would be more accurately described as a "post-secondary education savings account." The good news is that a 529 can be used for other types of education besides college.


Most people don't realize that 529 assets can be used at any eligible institution of higher education. That includes not only four-year colleges and universities but also qualifying two-year associate degree programs, trade schools and vocational schools -- both at home and abroad. This means that whether your child wants to be a computer expert or cosmetologist, an artist or an electrician -- and chooses to pursue post-secondary training in his or her chosen field -- there's a good chance you can pay for that training with your 529 assets.

If your son has another type of school in mind, find out if it qualifies for 529 assets. Generally speaking, to qualify, a school must be eligible to participate in student-aid programs offered by the Department of Education. has an easy online tool for determining if a particular school qualifies. You just need to take the time to do a little research -- or better yet, have your son do it.


Even if your son's path doesn't include any type of post-secondary education, you still have options. You opened the 529 for the benefit of your son, but the account belongs to you and you have the right to change the beneficiary.

As long as the new beneficiary is a family member -- a sibling, first cousin, grandparent, aunt, uncle or even yourself -- the money can be used for qualified education expenses without incurring income taxes or penalties. Qualified expenses include tuition, required fees, books, supplies, computer-related expenses, and even room and board for someone who is at least a half-time student.

Carrie Schwab Pomerantz

Carrie Schwab Pomerantz is a Motley Fool contributor.

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