529 and Student Loan

Forum|Forum|4 years ago
December 30, 2021
2 replies
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Hello,

If I pay off my student loan in December, then can I claim all my student loan payments for the year (monthly payments for the year + payoff amount) as a 529 Qualified Withdrawal or can I only claim the payoff amount as a 529 Qualified Withdrawal?

For example:
I pay $100/month January through November for a total of 11 months times $100 = $1100.00.
I decide to pay off the balance $3750.00 in December.

Can I claim 1100.00 + 3750.00 = $4850.00 as a 529 Qualified Withdrawal?

Or just the payoff amount of $3750.00 as a 529 Qualified Withdrawal?

Thank you!

Not A Product Question

mglauner

Yes, you can use a 529 Plan distribution to pay your student loans, as long as the loan was used to pay for Qualified Education Expenses.

If this applies, you can use the $4850 as a qualified 529 distribution.

Click this link for more info on Paying Student Loans with 529 Plans.

Hal_Al

Employee

Plan holders can use 529 plans can withdraw a lifetime maximum of $10,000 to pay down student loan debt.

Anonymous

Thanks for the answers.

Follow-up question:

Can I use my remaining amount of my maximum allocated $10,000 to pay back student loans to be reimbursed for payments from prior years? I have been making payments for many years.

Thanks!