Can you use a 529 plan for SAT or ACT Test Prep? The short answer is no, you cannot use a 529 plan to pay for SAT or ACT prep courses and tutoring.
However, all is not lost. While SAT and ACT prep courses can be expensive, they don't have to be. There are affordable options to help you prepare for the SAT.
Here's what you need to know and how to make sure that you only use your 529 plan for eligible expenses (and not trigger any 529 plan tax penalties).
Can You Use A 529 Plan For SAT Or ACT Test Prep?
You cannot use a 529 plan to pay for an SAT or ACT preparation course. According to the IRS, “expenses for sports, games, hobbies or non-credit courses do not qualify.” Since SAT and ACT courses are generally not for credit, they don’t count as a qualified expense.
You can find the full list of qualifying 529 plan expenses here.
Free SAT Preparation Options
While you cannot use 529 funds to cover SAT prep costs, you might be able to get ready for the test without spending a dime. Khan Academy is a free online platform that offers a wide range of study materials, including SAT test preparation materials.
When you use Khan Academy, you can connect the platform to your College Board account. From there, Khan Academy will assess your part test performance to determine where you should focus your study efforts.
According to the platform, students who use the practice offered by Khan Academy for at least 20 hours see a 115-point score boost. With an improvement like that, you might not need to pay for additional SAT prep courses.
Learn more about Khan Academy in our full review.
Paid SAT Preparation Options
While not every college and university requires a standardized test score, most do. For some students, an SAT preparation course is a helpful tool they can use to earn a higher score. While an SAT prep course can be helpful, it can also be fairly expensive.
Below is a look at some of the SAT preparation services and their costs:
- Kaplan: Kaplan offers a Digital SAT course taught by instructors who scored in the 99th percentile for the SAT. It costs $640, which can be paid in installments.
- PrepScholar: PrepScholar offers an Online Prep course for $397. If you want one-on-one support, tutoring packages start at $995.
- Varsity Tutors: If you are looking for support on an as-needed basis, the month-to-month style membership for Varsity Tutors might be the right fit. Packages start at $269 per month, which come with access to live courses.
- The Princeton Review: The Princeton Review offers an online course and one-on-one tutoring for students seeking a higher SAT score. The Digital SAT 1,400+ course costs $1,899. Individual tutoring starts at $175 per hour.
Based on the options above, you can see that SAT prep can cost hundreds or thousands of dollars. The best SAT prep options should help students achieve their best possible score. But it’s always a good idea to shop around to find the best SAT test prep option for your situation.
Related: Best Test Prep Courses
Is SAT And ACT Prep Worth It?
The college admissions process is increasingly competitive. If a college or university requires SAT scores as a part of their admissions process, landing a high score is one way to tip the scales in your favor.
An SAT preparation course can be a significant expense for any family. But the reality is that regardless of the price tag of your prep course, you’ll need to commit to putting in the effort if you want to see a higher score.
For many students, starting with a free resource, like Khan Academy, is a good place to start. Put some time into working through the free materials. After putting those free resources to use, then opting to pay for an SAT prep course could provide the additional support you need.
The Bottom Line
Taking the SAT is often a large part of the college preparation process. If you are applying for colleges that require an SAT score as a part of the admissions process, then working to earn a higher score can pay off.
While some SAT prep courses are expensive, you cannot use 529 funds to cover the cost. For students who want help preparing without paying for support, consider taking advantage of the free resources offered through Khan Academy. But if you need extra help, paying for a preparation course out of pocket can help you take your score to the next level, especially if you work with a reputable SAT test prep service.
Editor: Ashley Barnett Reviewed by: Robert Farrington
Sarah Sharkey is a personal finance writer who covers banking, credit, student loans, and insurance for The College Investor. She has written for leading financial outlets including Bankrate, Business Insider, and more, helping readers make confident choices about borrowing, saving, and building wealth.
Sarah holds both a bachelor’s and a master’s degree from the University of Florida, and her background in management and research informs her clear, practical approach to complex financial topics.