Let’s face it, textbooks are expensive. However, while the cost has ballooned for years, renting textbooks or purchasing e-books are two popular alternatives that can reduce the price tag for families. Textbook purchase (or rental) counts as a qualified education expense only if the textbook is listed as required reading in a course syllabus, but here are a few factors to consider:

Renting Textbooks with a 529 Account

One of the key benefits of a 529 account is the flexibility it offers in covering qualified education expenses.  Renting your required reading textbooks can be a cost-effective alternative to buying those materials.  Fortunately, 529 accounts allow you to use the funds for this purpose.

Buying E-Books with a 529 Account

If you’d rather not rent a textbook, consider purchasing required reading materials as e-books. These e-books often come at a lower cost compared to physical textbooks, and they offer the convenience of immediate access. So long as the e-book is a required reding in a course syllabus, you can use 529 funds for that purchase.

Here’s how you can make the most of rented textbooks or e-books with your 529 account:

• Check for Availability: Look for rental or e-book versions of your required textbooks. Many institutions and publishers offer digital versions that can be more affordable.
• Confirm Requirement: Ensure that the textbook is listed as required reading in your course syllabus. This is crucial for it to qualify as a qualified education expense under the 529 plan.
• Purchase (or rent) and Document: When buying a required reading textbook as an e-book, or renting the textbook, keep the receipt or purchase confirmation. This documentation will be important for ensuring that your withdrawal from the 529 plan is considered valid.
• Payment from the 529 Account: Use your 529 funds to pay for the required reading textbook or e-book by requesting a distribution. Just as with physical textbooks, the payment should match the amount of the required education expense.

Renting textbooks or buying e-books can be a smart way to save money during your college years and using your 529 account to cover these costs is a viable option. Just remember that the textbooks must be listed as required reading in your course syllabus, keep good records, ensure that the expenses are qualified and manage your withdrawals carefully. With these steps, you can make the most of your 529 savings and ease the financial burden of higher education.