Can a 529 plan be used to pay student loans?

No. Under the new provision, up to $10,000 of the 529 plan may be used to pay off student loans borrowed by the beneficiary and their siblings, without changing the beneficiary name. Do I Have to Pay State Taxes on the Money Withdrawn From My 529 Plan to Pay My Student Loans?

What are the benefits of a 529 plan?

The SECURE Act, which became law on December 20, 2019, expanded the benefits of 529 plans by adding student loan repayments and the cost of apprenticeship programs as qualified expenses. You can take a tax-free 529 plan distribution to repay up to $10,000 in student loans owed by each of the beneficiary and the beneficiary’s siblings.

Can a 529 plan beneficiary take out student loans?

The 529 plan account owner should check their state’s rules. Some college costs, such as health care and transportation costs, can not be paid for with 529 plan savings. However, a 529 plan beneficiary can take out student loans to cover these costs, and then take a 529 plan distribution to repay the student loans later.