As long as your 529 funds are used to pay 'qualified education expenses' (which include room and board) how you set that up to be paid is up to you. Making an arrangement with the bank for a monthly distribution for housing sounds like a viable option. Be sure to keep records for yourself, however.
When you receive your 1099-Q, if the Total Distribution is less than your Education Expenses (less any Scholarships/Grants), you are not required to enter your 1099-Q into TurboTax.
Click this link for detailed info on the 1099-Q.
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