Comments on: Can You Use A 529 Plan To Pay Student Loans?

By: C Brian

C Brian — Sat, 02 Nov 2024 21:48:07 +0000

In reply to Robert Farrington. Thank you very much for your quick reply (and your expertise!).

By: Robert Farrington

Robert Farrington — Sat, 02 Nov 2024 21:41:04 +0000

In reply to C Brian. You simply take the distribution and pay the loan. I'd do each separately (maybe a week a part), to keep it clean. You are the keeper of your own records, the only time you need to prove this is if the IRS asks. Second, I'd make the loan payment via your loan servicer's website. That way you can ensure it's processed correctly.

By: C Brian

C Brian — Sat, 02 Nov 2024 18:40:57 +0000

I’m looking for information on the mechanics of HOW I execute a loan payment from a sibling’s 529.

I will be using funds in one child’s 529 account to pay down $10,000 to each of two siblings’ loan balances (so, $20,000 total).

Do I just take the distribution and pay the loans, making sure to match the distribution and the payment in the same year?

Or, do I have to transfer the money from Child A into separate 529 accounts for Child B and Child C and then pay the loans from those accounts?

In other words, can I go directly from Child A’s account to the loan repayments? Or do I have to set up this middle step?

By: Mike

Mike — Thu, 18 Jul 2024 19:40:37 +0000

Thank you for this article. I have used $10,000 from our 529 account to pay my down my wife’s loans. If I read this correctly, I can refinance some of the remaining loan under my name, create a 529 for myself, transfer some of the money we have invested into my new 529, and then pay up to $10,000 since it is now considered my loan?

By: Michael

Michael — Thu, 18 Jul 2024 18:31:07 +0000

Mark – can the $10000 loan repayment from SECURE 2.0 be a reimbursement to the parents who are in repayment on a qualified loan from a prior year?