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Money saved in a 529 plan can be used, tax-free, to cover various education-related expenses.

• Qualified expenses include tuition and fees associated with the college or graduate school, as well as books, computers and related equipment, and room and board costs.

• Qualified expenses also include tuition expenses at elementary, middle, and high schools (private, public, or religious). This amount is limited to $10,000 per year, per beneficiary.

• The SECURE Act of 2019 expanded qualified expenses to now include costs of apprenticeship programs and student loan repayments as well. The amount that can be used to pay student loan repayments is limited to $10,000 per beneficiary.

If you choose to start saving with a Backer Safe, your money will be held at one of the largest U.S. banks for your benefit and will be FDIC-insured up to $250,000. They'll invest your savings in a 529 plan once you're ready.

If you choose to invest your savings in a 529 plan, your investment will be placed in a state-sponsored account managed by a national investment company. Your investment will be tax-free as long as you end up using it for qualified education expenses.

Most 529 plan investments are not insured by the FDIC, and the portfolio selection we recommend will not be FDIC-insured. However, they can change your portfolio selection if you prefer to be invested in FDIC-insured funds. Please email them at support@collegebacker.com and they make this change for you.

If you'd like to set up a college fund, CollegeBacker can help you enrol in one of the country's best tax-free 529 college savings plans in under 5 minutes. Answer a few simple questions and they will help you choose the right college savings plan investment option. CollegeBacker only recommend a low-cost, highly-rated 529 plan and will help you choose a portfolio that automatically reduces risk as your child ages.

CollegeBacker remove the complexity and guesswork so you can focus on what matters: saving more for your child's education.

A 529 isn’t limited to just paying undergraduate tuition expenses. It can also be used to pay for other college-related expenses, including dorm fees and books. If the scholarship covers all expenses, then you can change the beneficiary of the account or withdraw the money for a different purpose. However, if you choose to withdraw the money and use it for something else, a 10% penalty and tax will apply to the earnings portion of the investment.

Your 529 plan savings can be used, tax-free, to pay for a variety of qualified expenses. For example, you can use those funds to pay for college and graduate school costs; tuition expenses at elementary or secondary public, private, or religious schools; student loan repayment; and apprenticeship programs.