CLEP tests currently cost $80. While AP test fees can't be paid for from 529 plan savings, in some cases CLEP fees can – if they are taken during college, Fitzgerald says.
"If the student is already enrolled in college and is taking CLEP to substitute for college credits, then costs of the test might be covered," he says.
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That's because the exams taken during college meet the IRS standard of being taken at an eligible educational institution – the same reason dual-credit courses are covered.
Since what qualifies as a withdrawal free from tax penalties may vary by 529 plan, families should consult both their 529 plan manager and a tax professional before withdrawing funds for CLEP tests, Fitzgerald says.
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