What is a 529 college payment plan and how can I use one to make payments to my student account?

No USC employee is authorized to advise you regarding tax questions.
Please contact a tax professional if you have any questions.

In general, a 529 Plan is an education savings plan operated by a state or educational institution designed to help families set aside funds for future college costs. It is named after Section 529 of the Internal Revenue Code which created these types of savings plans in 1998. 529 Plans can be used to meet costs of qualified colleges nationwide. In most plans, your choice of school is not affected by what state your 529 savings plan is from. However, you should check with your 529 plan to see if there are any state or other restrictions which would prevent payments to USC.

Payments should be mailed at least 5-10 business days before the settlement deadline
if mailed within the continental U.S., (allow more time for HI, AK and international mail)
so that they may be received by the settlement deadline.

Please note that it is very likely that payments from your 529 plan (ie: checks) must be made payable directly to USC. To avoid late fees and penalties, you should to contact your 529 Plan administrator to find out how much additional time they will require to insure that we will receive your payment in time.

Parents and other individuals who receive 'reimbursements' of payments from a 529 plan may find that the reimbursements have become taxable income. If you have any questions, please contact a tax professional.

For more information about 529 plans or the Qualified Tuition Program, you may also go to the IRS' website at: http://www.irs.gov/. For additional information, refer to Chapter 8 of Publication 970, Tax Benefits for Education.

Note about taxes and 529 plans: The 1098-T is a statement of qualified tuition and fees charged by USC that we are required to provide to the student and to the IRS each year. Since the 1098-T is intended to assist you in calculating your eligibility for a Hope Scholarship or Lifetime Learning Credit, "qualified charges" for this purpose are defined more narrowly than they are for other programs such as 529 plans. In general, qualified tuition and related expenses for the 1098-T are tuition and fees required for enrollment and do not include items such as room and board.