Scholarship Stipend and 529 Plan

collegework
Wed, 30 Aug 2017 13:25:47 +0000

Thank you @twoinanddone. Yes, I do understand about what the 529 pays for and that sort of thing. What I’m unsure of is how it works with the stipend. So it sounds like the stipend will take down the amount I can use with the 529 plan? So, for example. If room and board costs $8,000, then the university will apply the $3,500 to it, and I can only use the 529 funds for the remaining $4,500 (without being taxed, I mean)?

I guess it is confusing because I don’t believe there are any rules as to how I use that stipend, so in the grand scheme of things we could assume we’re using it for travel or some other item that will cost us money for student that isn’t a QEE (even though the university is directly applying stipend to student’s account). And save the 529 funds for the room and board (even though university will have taken care of part of that with the stipend).

Sort of switching around how expenses are paid for. It would be clearer if the university just gave us a check for the stipend. Because I assume if your stipend is over the amount of expenses with university, they issue you a check? Which makes it seem that you can use it however you want to…right?

I’m just not sure how submitting expense receipts goes for the 529 plan. It seems like my expense for room/board is only going to show $4,500 since the $3,500 stipend will have been applied there.

I hope I’m making sense, and I don’t mean to sound difficult. I so appreciate any help! Would it be better to post in the Alabama forum? Do different universities handle the way stipends are paid differently?

THANK YOU!