Can a non-citizen open a 529 plan?

Yes, in most cases, as covered above under “Who qualifies.” A small number of plans add their own state residency requirements, so it’s worth checking the specific plan under consideration.

What happens to a 529 plan if my child studies abroad?

529 funds can be used at many international universities that participate in U.S. federal student aid programs under Title IV. Eligibility can be verified using the Federal School Code lookup before making any withdrawals. Qualified expenses at eligible foreign institutions follow the same rules as domestic schools: tuition, fees, books, and room and board qualify; travel, international health insurance, and personal expenses don’t.

How does a 529 account affect financial aid eligibility?

The impact is generally modest. If a parent owns the 529, only up to 5.64% of its value counts toward the Student Aid Index, according to Savingforcollege.com, considerably more favorable than a student’s own savings account at 20%. Accounts owned by grandparents were never counted as an asset on the FAFSA to begin with, and since the FAFSA Simplification Act took effect for the 2024–2025 award year, distributions from those accounts no longer count as the student’s untaxed income either, which used to be the bigger hidden cost. Merit-based scholarships aren’t affected either way.

How is a 529 savings plan different from a 529 prepaid tuition plan?

A 529 savings plan, the type covered on this page, invests contributions in the market, so the account’s value depends on investment performance over time. A 529 prepaid tuition plan instead lets a family lock in tuition credits at a specific school or state system at today’s price for use later. Savings plans are generally more flexible if a family isn’t yet sure where a child will study; prepaid plans can offer real savings for families confident about a specific in-state school. See the full comparison of 529 savings plans and prepaid tuition plans for details on eligibility, flexibility, and risk.

Back to Glossary

What is a 529 plan? Tax-advantaged college savings explained

Key takeaways
- A 529 plan is a tax-advantaged savings account used to cover qualified education expenses, from college tuition to K-12 costs.
- Earnings in a 529 account grow free from federal income tax, and withdrawals for eligible expenses aren’t taxed at the federal level.
- Non-citizen parents can open a 529 plan with a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN); immigration status alone doesn’t disqualify anyone.
- A non-citizen child can be named as the beneficiary, provided they have a valid SSN or ITIN.
- Money transferred from abroad can fund a 529 account once it clears a U.S. bank account, though the exchange rate at the time of transfer affects how much actually gets deposited.

A 529 plan is a tax-advantaged savings account designed to fund education expenses. Here’s why it matters for immigrant families saving for a child’s education in the U.S.

Most content about 529 college savings accounts is written for families who were born here and banked here their whole lives. If you arrived in the U.S. with a visa, if you’re sending money internationally to support a student, or if you’re unsure whether your immigration status affects your eligibility, this page is written for you.

What is a 529 plan?

A 529 plan is a savings account sponsored by a U.S. state or educational institution that offers tax advantages for education costs. Contributions are made with after-tax dollars, but earnings grow free from federal income tax, and qualified withdrawals, tuition, fees, books, room and board, aren’t taxed at the federal level. The name comes from Section 529 of the Internal Revenue Code, which the IRS outlines in detail⁠(opens in new window).

There are two types of 529 plans: savings plans, covered on this page, and 529 prepaid tuition plans, which let a family lock in tuition at today’s rate at a specific school rather than investing contributions in the market. Families weighing the two structures can see a full side-by-side comparison of 529 savings plans and prepaid tuition plans⁠(opens in new window).

Why a 529 plan matters for your finances?

The core advantage of a 529 account is compound growth without the drag of annual taxes on earnings, unlike a regular savings account, where interest is taxed each year. Nearly 40 states also provide a state income tax deduction or credit for contributions, though the value varies significantly, some cap the annual benefit at a few hundred dollars, others offer unlimited deductions. If a given state doesn’t offer one, it’s generally possible to open a plan sponsored by any state instead.

There’s no federal income limit to open a 529 plan and no age limit for the beneficiary, a 529 can be opened for a newborn, a teenager, the account owner themself, or a grandchild.

What counts as a qualified education expense?

Qualified higher education expenses include tuition, mandatory fees, books, supplies, computers, and room and board, provided the student is enrolled at least half-time, per IRS guidance⁠(opens in new window). Up to $10,000 in student loan repayments over a lifetime also qualifies.

K-12 expenses qualify too, and the rules changed significantly for the 2026 tax year: the One Big Beautiful Bill Act, signed in July 2025, doubled the annual K-12 withdrawal limit from $10,000 to $20,000 per beneficiary and broadened what counts as qualified beyond tuition, adding tutoring, test fees, dual-enrollment costs, curriculum materials, and educational therapies for students with disabilities. The same legislation opened 529 funds to postsecondary credentialing programs too, covering tuition and fees for things like trade certifications and professional licensing exams. Not every state automatically follows these expanded federal rules for state tax purposes, so it’s worth checking a specific plan’s state guidance first.

Non-qualified withdrawals, money taken out for travel, health insurance, or other personal expenses, are subject to ordinary income tax on earnings plus a 10% federal penalty.

Who qualifies for a 529 plan as an immigrant?

This is the question most mainstream guides skip entirely.

Most 529 plans require the account owner to be a U.S. citizen or a resident alien with a Social Security Number or an ITIN, so someone on an H-1B, L-1, or other work visa with either is generally eligible to open one. The beneficiary also needs a valid SSN⁠(opens in new window) or ITIN to use the funds. If a child doesn’t yet have either, for example because they were born abroad and are on a dependent visa, a practical workaround is to open the account with the parent as both owner and beneficiary, then transfer the designation once the child has their own SSN or ITIN.

Most plans are also open to residents of any state, though a small number restrict theirs to in-state residents, so it’s worth confirming before applying.

How to send money from abroad to fund a 529 account?

Money sent from abroad can go directly into a 529 account, but there’s a step in between: contributions must be made in U.S. dollars from a U.S. bank account, so a relative abroad would transfer money internationally to a U.S. account first, then contribute once it’s cleared and converted. Sending money for university tuition abroad⁠(opens in new window) covers the practical steps. Non-U.S. residents can still contribute as a gift, since many plans accept contributions from anyone, they just can’t be the account owner unless they’re U.S. taxpayers with an SSN or ITIN⁠(opens in new window).

How exchange rates affect education savings across borders?

For families who earn in one currency and save in another, exchange rate movements are part of the real cost of building a 529 balance, since the same contribution translates to a different dollar amount depending on when the transfer happens. Some families make smaller, more regular contributions rather than one large annual transfer, spreading that risk across multiple points in time. For a larger recurring cost like tuition paid directly, planning ahead for large semester tuition deadlines⁠(opens in new window) follows similar logic.

Common questions about 529 plans

Can a non-citizen open a 529 plan?

Yes, in most cases, as covered above under “Who qualifies.” A small number of plans add their own state residency requirements, so it’s worth checking the specific plan under consideration.
What happens to a 529 plan if my child studies abroad?

529 funds can be used at many international universities that participate in U.S. federal student aid programs under Title IV. Eligibility can be verified using the Federal School Code lookup⁠(opens in new window) before making any withdrawals. Qualified expenses at eligible foreign institutions follow the same rules as domestic schools: tuition, fees, books, and room and board qualify; travel, international health insurance, and personal expenses don’t.
How does a 529 account affect financial aid eligibility?

The impact is generally modest. If a parent owns the 529, only up to 5.64% of its value counts toward the Student Aid Index, according to Savingforcollege.com⁠(opens in new window), considerably more favorable than a student’s own savings account at 20%. Accounts owned by grandparents were never counted as an asset on the FAFSA to begin with, and since the FAFSA Simplification Act took effect for the 2024–2025 award year, distributions from those accounts no longer count as the student’s untaxed income either, which used to be the bigger hidden cost. Merit-based scholarships aren’t affected either way.
How is a 529 savings plan different from a 529 prepaid tuition plan?

A 529 savings plan, the type covered on this page, invests contributions in the market, so the account’s value depends on investment performance over time. A 529 prepaid tuition plan instead lets a family lock in tuition credits at a specific school or state system at today’s price for use later. Savings plans are generally more flexible if a family isn’t yet sure where a child will study; prepaid plans can offer real savings for families confident about a specific in-state school. See the full comparison of 529 savings plans and prepaid tuition plans⁠(opens in new window) for details on eligibility, flexibility, and risk.

In Summary

A 529 plan is a genuinely tax-efficient way to save for education costs in the U.S., and the eligibility rules are more accessible than many immigrants assume. Anyone with a valid SSN or ITIN who pays U.S. taxes can likely open one regardless of visa status, and a child can be named as the beneficiary once they have their own SSN or ITIN.

For families sending money internationally, that adds a layer of planning: contributions must be made in U.S. dollars from a U.S. account, so the exchange rate⁠(opens in new window) at the time of transfer affects the real value of every deposit. Planning transfers when rates are favorable helps education savings go further, and if you’re supporting a child’s education abroad, send money for study abroad expenses⁠(opens in new window) with the exchange rate shown upfront before you confirm.

This publication is provided for general information purposes only and is not intended to cover all aspects of the topics discussed herein. This publication is not a substitute for seeking advice from an applicable specialist or professional. The content in this publication does not constitute legal, tax, or other professional advice from Remitly or any of its affiliates and should not be relied upon as such. While we strive to keep our posts up to date and accurate, we cannot represent, warrant, or otherwise guarantee that the content is accurate, complete, or up to date.