I only had one small 529 for my son's college years. I withdrew all of it in one year. The total in the fund was around $7000 LESS than tuition for that year. (That's not including room and board, not including fees, etc. Just tuition. Scholarship was $1,000 per year, so that doesn't make a difference.)
The IRS not only claims I have to pay tax on the earnings for that fund, but they taxed at a 62% rate. Plus interest on top of that.
I have A LOT MORE in my daughter's 529s. How do I avoid this mess in the future? I will only using the funds for tuition so I don't have to argue over whether campus housing and campus dining don't fit some weird IRS interpretation of college expenses. Should I immediately cease to add money into the 529s? I was hoping to use them for 7 of 8 semesters, but that was under the assumption that they were used for tuition, room and board.