My kid’s considering a college in Japan. We have a 529 acct for him. I understand that you can use 529 money without penalty for int’l colleges that “participate” in a US federal aid program. This Japanese college is listed on the excel “International Schools That Participate in the Federal Student Loan Programs” (at the site studentaid.ed.gov/sa/types/international#research-schools ), so at first I assumed that it must be 529-eligible.
However, like a lot of colleges on that list, the participation is marked “deferment only”, which means that federal loans can NOT be given to cover costs there, but any prior fed loans can be deferred while attending. Now, you never can get any fed grants for study abroad (my understanding), so in effect this seems to mean that this college would never be receiving any US fed aid money, even though it is on the fed “participation” list. I called my 529 provider asking for confirmation on whether this college would be OK for 529 withdrawals, but the person there thought that 529 money is only good for colleges that actually take in US federal aid.
Questions:
- Has anyone had this same experience, and can confirm whether 529 can be used for “deferment only” colleges abroad?
- Is there any way to get an advance determination about whether a college is fine for 529? I’d hate to take the risk of “just trying it out”!