Qualified Educational Expenses

What exactly are qualified educational expenses when it comes to Coverdell Education Savings Accounts (CESAs)? These expenses are made up of tuition, fees, books, supplies, equipment, and room and board at eligible institutions. Eligible institutions are colleges, universities, vocational schools, and other postsecondary institutions able to participate in the Department of Education's student aid programs.

Warning Room and board is generally limited to the school's listed room and board charges for each year the student is living off-campus and not at home. Remember, too, that the educational institution must be eligible to participate in the federal government's financial aid programs. Therefore, if your daughter decides to live at home and enroll in the local chapter of the Models Make Much Money School, she won't be able to use CESA funds to pay for room and board for living at home, and chances are good that her school will not be part of that qualified list of educational institutions.

Qualified expenses for CESA purposes also include the costs involved in attending kindergarten through 12th grade. Public, religious and private schools are covered and besides tuition, qualified expenses include tutoring, computer equipment (including software), Internet access fees, uniforms, and transportation.