Are any of these institutions 529 eligible?

[ctcarl]

Title says it all.  Are Saylor, SL, SDC, InstantCert, OnlineDegree, Sophia, Coopersmith or Davar 529 eligible?

[bjcheung77]

Muhaha! The best people to answer that would be your financial institution where you currently have the 529 plan, it's to your benefit to specifically ask them as these "providers" are not really educational institutions even though their courses can be used to grant college credit.

I've looked at a few sites, this one has a good break down but doesn't totally answer the question: https://thecollegeinvestor.com/18450/qua...-529-plan/ and their other link: https://thecollegeinvestor.com/21959/529...te-school/

[sambam0812]

Title says it all.  Are Saylor, SL, SDC, InstantCert, OnlineDegree, Sophia, Coopersmith or Davar 529 eligible?

Not sure about others, but SL says directly in their FAQ they are not 529 eligible.

[bjcheung77]

To elaborate on the "Muhaha". This was what came to mind: Study.com powers View High School, they charge a hefty amount now but before they were accredited, it was just $160/year using the Study.com courses that are ACE/NCCRS recommended for credit. Link: https://www.viewhighschool.org/enrollment

Just for individuals reading, most alternative providers will not fit the bill. However, there are private colleges that are NA/RA that have a high school/dual credit program that have ACE recommendations for credit. It may work for example, if someone uses Penn Foster ACE recommended dual high school/college credits to use the 529 with.

The 529 should be usable for only "tuition" for private high school/colleges, etc, and View High School technically "IS". So, if it was a couple years or maybe 3 years back, this would be a viable option. Nowadays, I would not recommend it, I highly suggest taking courses through the local community college and using the 529 to pay for it as that's "technically" what it should be used for.

You should speak with your financial institution to verify before investing in any of these alternative providers, a community college, local 4 year college, or the local university are the way to go, as almost everything including tuition would be usable...

[ctcarl]

most alternative providers will not fit the bill. 

Aaaand that's really the bottom line.

Thanks!

[BrianFallon]

Title says it all.  Are Saylor, SL, SDC, InstantCert, OnlineDegree, Sophia, Coopersmith or Davar 529 eligible?

Unfortunately no.  

Source:  my 15 years experience at the IRS, where I teach new hires their four month basic income tax course, which includes Education Credits and Benefits.

And IRS publication 970 on page 57 where it defines "eligible educational institution:"

"An eligible postsecondary school is generally any accredited public, nonprofit, or proprietary (privately owned profit-making) college, university, vocational school, or other postsecondary educational institution. Also, the institution must be eligible to participate in a student aid program administered by the U.S. Department of Education. "

So, two pronged - accredited AND able to have students use a Pell Grant.

If you happen to use the 529 for ineligible expenses - which fees for Saylor et al would be, you'd be taxed on that amount as income, as well as subject to a 10% penalty.  A portion is a return of your contribution and is thus not taxable.  (529 plan contributions are made with POST tax dollars [dollars already taxed], so the return of those dollars is also non taxed)  


If you use tax prep software, the software will calculate it all.    It's NOT ideal but if you have no other resources to finish your degree, well, life is about choices.

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To elaborate on the "Muhaha".  This was what came to mind:  Study.com powers View High School, they charge a hefty amount now but before they were accredited, it was just $160/year using the Study.com courses that are ACE/NCCRS recommended for credit.  Link: https://www.viewhighschool.org/enrollment

Just for individuals reading, most alternative providers will not fit the bill.  However, there are private colleges that are NA/RA that have a high school/dual credit program that have ACE recommendations for credit.  It may work for example, if someone uses Penn Foster ACE recommended dual high school/college credits to use the 529 with.

The 529 should be usable for only "tuition" for private high school/colleges, etc, and View High School technically "IS".  So, if it was a couple years or maybe 3 years back, this would be a viable option.  Nowadays, I would not recommend it, I highly suggest taking courses through the local community college and using the 529 to pay for it as that's "technically" what it should be used for.

You should speak with your financial institution to verify before investing in any of these alternative providers, a community college, local 4 year college, or the local university are the way to go, as almost everything including tuition would be usable...

You generally should check with your tax advisor for tax matters.  

(Penn Foster - for example - would NOT be an eligible institution because while they ARE accredited, they do not accept Pell Grants. While they have a secondary school, and you can use a 529 for elementary and secondary expenses, the school must qualify under your state law. Penn Foster does not list any states for their secondary program - yes it is accredited as a high school, but the education authority of your state - Ohio is the Ohio Department of Education for example - must say they are a secondary school as well.)

A 529 plan also counts as eligible expenses:

-Room and board for half-time students;
-Computer equipment and supplies;
-After 2018,  fees, books, supplies, and equipment required for the designated beneficiary’s participation in an apprenticeship program - check the Department of Labor;
-after 2018, no more than $10,000 paid as principal or interest on qualified student loans of the designated beneficiary or the designated beneficiary’s sibling. 
-Up to $10,000 of tuition at an eligible ELEMENTARY or SECONDARY school.