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Using a 529 plan to pay for gap year

Last year, Malia Obama made headlines when the White House announced that she would take a gap year between high school and college. The hiatus from classrooms, textbooks and tests has been a common occurence in other countries like Australia, UK and Israel; and it has become an increasingly popular choice in the US. I didn't take a gap year but I studied in the UK during my junior year of college and backpacked across Europe with friends. Traveling certainly expanded my worldview and I would encourage my own daughter to consider a gap year. In today's global economy, it can only help to have more experience with other cultures and a perspective that expands well past any borders. The concept is that college bound students go on an adventure, do something meaningful and arrive as a freshman a year later more mature and focused. This can be a year of travel, community service, interning, language immersion or working -- or a combination of any of those.

Studies have shown that not only do the students go on to perform better than their non-gap-year classmates, they also tend to end up in more satisfying careers. A growing number of colleges, including all the Ivy League institutions, have been on to the idea as a positive choice for incoming students; and Harvard has for decades been urging members of its incoming class to consider it. If your child just graduated and is considering this option, you may be freaking out a bit. However there are instances where you can use a 529 plan to pay for gap year programs.

Outward Bound has a partnership with Western State Colorado University and Carpe Diem Education has a partnership with Portland State University. Because of their university affiliations, some of their programs allow students to earn college credits while on gap year and also pay for their more structured experiences with 529 money. This may help parents feel better that their kids aren't goofing off and also have a potential way to finance the journey as well.

 


Is your child going to take a gap year? Would you support their decision to take a gap year?

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About the Author: Chris Wang

Chris Wang

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