If I’m a graduate student, can I use 529 plan funds without it affecting my loan eligibility?


I am an out-of-state, independent graduate student who will be attending a public university. I have been approved for the maximum Direct Unsubsidized Loan and a Grad PLUS Loan. However, the total amounts still do not pay for all of my annual college expenses. Can my parents put money in a 529 account and help pay living expenses without it affecting my eligible loan amounts for this and next year?


Loan amounts, along with 529 plan distributions, may not exceed the college's cost of attendance (COA). So long as the total does not exceed COA, it should not reduce your Direct Unsubsidized Loan and Grad PLUS Loan amounts.

Note that if you are receiving other student financial aid besides the loans, the money in the 529 plan account and distributions from the 529 plan account could affect your eligibility for the other financial aid funds.

It would be best for you to talk to the financial aid office at your graduate school for information about any institution-specific policies.

Graduate School Loans