I know I can borrow against my 401(k), but can I borrow against the value of my 529 account?


No. Section 529 plans do not allow loans against an account’s assets. You can, however, make withdrawals from the plan to pay for qualified educational expenses. Keep in mind, though, that nonqualified withdrawals (i.e., funds not used for qualified higher education expenses) are subject to a federal penalty tax of 10 percent on the earnings portion of the withdrawal (a state penalty may apply as well). You may also owe federal, and in some cases state, income taxes on the earnings portion of a nonqualified withdrawal.

Note: Investors should consider the investment objectives, risks, charges, and expenses associated with 529 plans before investing. More information about 529 plans is available in each issuer’s official statement, which should be read carefully before investing. Also, before investing, consider whether your state offers a 529 plan that provides residents with favorable state tax benefits.