So, your student is moving out of the dorms and into an apartment this year. Can you still use your 529 funds to pay for housing? Yes. Do they need to save every single grocery store receipt in order for you to do so? No.
Room and board expenses qualify as educational expenses– i.e., you can use your 529 money to pay for them– regardless of where the student lives (on-campus or off) as long as the student is enrolled at least half-time. However, for off campus housing the expense is “qualified” only up to the allowance for room and board that the school itself uses in its cost of attendance figures. (A “qualified higher educational expense” or “QHEE” is one for which you can use “qualified” or tax-advantaged funds such as 529 plans.) Which means, the qualified amount– the amount for which you can use 529 funds– is determined by the school, not by your actual costs. You can generally find that amount on the school’s website under Cost of Attendance. The good news is, you don’t need to collect grocery receipts from your student. The bad news is, you might be paying room and board expenses beyond what you can spend 529 dollars on.
For students living on campus, the full cost of room and board is qualified.