1. Son enrolled in Fall Semester for 2 courses. Paid fees from personal bank account as the tuition deadline was too close to send from 529 plan as their usual check delivery to school can take 2-3 weeks.
2. Later son decided to enroll in one more course totaling 3
3. Sent payment for all 3 courses from 529 as this was a qualified withdrawal and I know school would refund the previously sent money (2 courses)
4. Son decided to defer his Fall semester and dropped out of Fall semester
5. School issued a check for the 2 courses paid from personal bank account
6. School did not encash the 529 check (for 3 courses) and sent it back to us
Vanguard (529 plan) says since the school has not encashed the check and sent a refund to the plan owner, cannot do a recontribution to the same student. Instead they can stop payment and contribute the amount to another (student's brother) account as a rollover contribution to avoid Tax consequence.
Is there any other option around this?
Thank you
