It depends on the state that sponsors the 529 plan, and whether you're talking about a prepaid tuition plan or a college savings plan. Under federal law, room and board costs are "qualified education expenses." But states aren't required to follow federal rules, and prepaid tuition plans typically won't allow 529 funds to be used for room and board expenses. Since most college savings plans follow federal rules, however, funds in a college savings plan can generally be used to pay for these costs as long as the student is enrolled in school on at least a half-time basis.

Room and board costs for students living on-campus are limited to the actual amount charged by the school or to the amount most residents are charged, whichever is higher. Room and board costs for students living off-campus, including students living with their parents, are limited to the amount the school decides is reasonable. Each state's plan will spell out the guidelines that govern room and board expenses and what procedures to follow when requesting a withdrawal.