January 01, 2022
My mom told me that my college savings plan account can only be used for "Qualified Education Expenses." Can I use it for pizza? What if I want to be a pilot? Is that a qualified expense?
Quinn (Age 9)
"Qualified Education Expenses" is a fancy way of saying that your college savings account may only be used to pay for certain types of things while you are in college. It is the serious stuff, like tuition. Tuition is the amount your future school will charge you for each class you take. Typically, the more classes you take at one time, the more your tuition will cost. If you choose to become a commercial airline pilot you will need to pay tuition to your school for about four years and yes, you can use your college savings account to pay for it.
You may also use your account to pay for room and board. "Room" refers to the place that you will live, such as an apartment or on-campus housing. "Board" means food. So yes, you might be able to use your account to pay for pizza! But there are limits, so when the time comes, you should check again to make sure you are not spending too much.
Other expenses you can use your account for include fees, books, and a computer, if required. As you can see, going to college can be expensive! It is wonderful that your family has started a college savings account for you. Have you thanked them for this amazing gift or offered to fly them somewhere amazing when you've completed your degree?
Quinn, you're off to a great start. When you work hard and prepare, both you and your dreams will take flight!
Love from Alaska,
This material has been prepared for general and educational purposes only. This material does not provide investment, financial, legal, or tax advice. Please consult your tax or financial professional for details regarding your specific situation.