Yes, you can use funds in your 529 account to pay for off campus housing, but it’s not as simple as just adding up rent, utilities and food bills each month and withdrawing that amount. Instead, you need to check with your school’s financial aid office to determine what the off campus room and board figure is for your school. Regardless of how much you actually pay, that is the maximum Qualified Higher Education Expense (QHEE) amount that you can pay from your 529 account. The good news is, you don’t have to submit all of your receipts– though of course you do want to save them in case you’re audited.
And just a reminder: See my previous post “529 Plans: How to get money out” for more details on the withdrawal itself.