How to use a 529 plan to earn college credit in high school

A 529 is a US tax-advantaged savings account, owned by the adult who opened it. If you have one, it may stretch further than you think while your student is still in high school. ASU Universal Learner Courses let a high schooler earn ASU college credit online, and a 529 may help cover the cost.

This guide is written for the parent or grandparent who owns the account and makes the withdrawal. Adults with their own 529 can use the same rules for a course they take themselves. Register at ulc.asu.edu.

529 rules differ by state and by plan, and nothing here guarantees a specific fee qualifies. This page is general information, not tax advice. Confirm eligibility with your 529 plan administrator or a tax professional before you withdraw.

What changed for 529 plans in 2026

A federal law signed in July 2025 widened what counts as a qualified 529 expense and raised how much families can withdraw each year for kindergarten through grade 12. The annual K-12 withdrawal limit rose from $10,000 to $20,000 per student starting in 2026, and the list of qualified expenses now reaches well beyond private school tuition to include tutoring, standardized test fees and dual-enrollment fees.

State rules do not always match the new federal ones, so confirm your own plan’s rules before you withdraw. 

Can a 529 cover college courses taken in high school?

A 529 plan is a US tax-advantaged savings account, and many plans cover tuition and required fees at eligible institutions like Arizona State University. 

Depending on your plan and your state, the fees for a college course your student takes in high school may qualify the same way college tuition does. ASU is a fully accredited institution eligible for federal financial aid, the standard most 529 plans use to decide what they cover.

How Universal Learner Courses fit

ASU Universal Learner Courses let a high school student earn ASU college credit online, with no application and no prerequisites. You or your student pays $25 to enroll in a course. If they finish and are happy with their grade, you pay $400 to add the credit to an official ASU transcript. If they are not happy with the grade, they do not pay the $400, and nothing goes on their record.

There is no risk to your student’s GPA, and you control what you withdraw and when. Every course is designed by ASU faculty, so the credit carries the weight of a major research university. ASU is ranked the most innovative university in the United States by U.S. News and World Report. 

How do you use 529 funds to pay for a Universal Learner Course?

You have two ways to do it. You can pay the $25 enrollment fee and the $400 credit fee yourself, then reimburse the cost from your 529 account. Or, if your plan allows it, you can have the 529 pay ASU directly. 

For a fee this size, most families pay at checkout and reimburse themselves afterward. Take the 529 withdrawal in the same calendar year you pay the fee, the rule tax professionals follow to keep the distribution tax-free. A withdrawal taken in one year for a fee paid in another can be treated as non-qualified.

Keep your enrollment receipt and your withdrawal records together, so the distribution and the expense match at tax time. The IRS sets out what counts as a qualified expense in Publication 970. Confirm with your 529 plan administrator how your plan handles reimbursement and reach out to ulc.asu.edu/contact-us to find out if your plan can pay for the course directly with ASU. 

How much could a family save?

Earning credit early can lower the total cost of a degree, because each course your student banks in high school may be one fewer course to pay for later. How much it saves depends on what the receiving school accepts, so the math is different for every family.

Here is one illustration. A year of in-state tuition at a public four-year university averaged about $11,600 in 2024-25 (College Board, Trends in College Pricing). At that rate, a single three-credit course runs roughly $1,200 to $1,800, depending on the school. 

The same credit through a Universal Learner Course is $425. A student who completes several courses before college could save a meaningful amount, though the exact figure depends on the courses your student takes, what transfers and the school they attend. As a reminder, treat these numbers as an estimate, not a guarantee.

How to get started

1. Browse the full catalog of first and second year ASU courses available online at ulc.asu.edu/explore-courses/for-high-school-students.
2. No application, no waiting.
3. Enroll for $25 and start anytime, fully online.
4. Complete the course on your student’s own schedule, taught by ASU faculty.
5. If satisfied with the grade, pay $400 to add the credit to an official ASU transcript.

Your student could earn their first ASU college credit this semester, and a 529 may help cover it. Browse all Universal Learner Courses and enroll your high schooler today.

529 plans are a US tax-advantaged savings vehicle, and rules differ by state and by plan. This page is general information, not tax or financial advice, and makes no guarantee that any specific fee qualifies. Confirm eligibility with your 529 plan administrator or a tax professional before making a withdrawal.