If your child is going under the FIFA exception for students, then you might be able to use funds from their 529 plan to cover qualified expenses related to the schooling portion of their program. You will need to ensure the funds are only used for these purposes. You can only withdraw these funds for money that constitutes as “Qualified expenses”.
- Tuition and fees
- Room and board
- Books and supplies
Things that are NOT covered include:
- Travel expenses
- Travel insurance
- Health insurance
- Sports fees.
529 accounts can be used to cover tuition at some Universities abroad. If your student has graduated high school, there are also about 400 international programs that meet the requirements for federal student aid. You can check the Department of Education’s list of participating schools to see if the program you are considering is one of these.
The problem is that if your child’s travel is primarily to play soccer, the educational program the Academy utilizes may not be on this list. Many soccer Academies meet the FIFA educational requirement by offering language classes from nearby language school programs.
You can contact the language school affiliated with the Academy you are considering and ask if their students are permitted to apply for federal financial aid from the US. If they are, you can request a code from them that you will use when withdrawing funds. In this way, you will at least be able to have that portion of their expenses covered.
If you do try to use your withdrawal for these non-covered costs, you will be taxed on the withdrawals. You can also be penalized. You need to look at your situation very carefully. For instance, if room and board is part of the Academy package and not the school package, you cannot just pay for it with 529 funds without facing a potential penalty.