Educational Savings Accounts

[kepp]

Originally Posted by Dunit35

That's the only downfall with the educational stuff. What do they do with the cash if they don't go to school. It looks like it's a 10% tax penalty if it's not used for school.

From https://www.missourimost.org/content...529basics.html

What happens if the beneficiary doesn't want to continue his or her education?
If that's the case, you have a couple of options. You can stay invested in case he or she decides to attend school later (there's no age limit on using the money), you can change the beneficiary to an eligible family member, or you can withdraw the money for other uses. A 10% penalty tax on earnings (as well as federal and state income taxes) will apply if you withdraw the money to pay for nonqualified expenses.