Where do the funds left over from a 529 plan go to after all college expenses have been paid?

The leftover funds in a 529 plan after all qualified education expenses have been paid can be withdrawn and used for other purposes. However, the withdrawals will be subject to income tax on the earnings portion, plus a 10% federal tax penalty.

Therefore, while the *principal* can be withdrawn tax-free, any investment *growth* accumulated within the 529 plan is taxable unless it's used for qualified education expenses.

Some states also impose state taxes on the earnings, although many do not. The rules vary by state.

It's crucial to consult a financial advisor or tax professional before making such withdrawals, as the tax implications depend on individual circumstances.