Question: We have a 6 month old daughter and are looking into college savings for her. My daughter is fortunate enough to be able to hold 3 citizenships, US, Canada and Italy and will have many options when it is time for her to start considering college.
I am avid Marketplace Money listener and am familiar with 529 plans and how important it is to start saving early. When I began my research in my state, I wondered if my daughter can withdrawal the funds to go to a college/university outside the US and have not been able to get a straight answer. I am hoping you can provide a reliable resource to answer this question. Rey, Essex, VT
Answer: Your daughter is certainly going to have a culturally rich life.
The straight to your question is yes, you can use the 529 savings money to pay for college abroad with this caveat: It must be an “eligible” institution.
That used to mean the overseas college and university had applied to participate in the Federal Family Education Loan (FEEL) program. In 2008-2009 over 400 foreign schools participated in FFEL, according to the Department of Education. However, the FEEL program has been discontinued. Federal student loans are part of the Direct Loan Program. Foreign schools can participate in it. (The Department of Education established a Foreign Schools direct loan transition team to help with shift.)
Of course, your daughter is a long way from college, but you can get an idea of what Canadian, European, and other overseas college and universities are eligible for your 529 dollars here.
A good resource for all information involving 529 plans is Joseph Hurley’s savingsforcollege.com.
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