null GettyUsing A 529 Plan To Pay Student Loans529 plan account owners may now withdraw up to $10,000 tax-free for payments toward qualified education loans. Any student loan interest paid for with tax-free 529 plan earnings is not eligible for the student loan interest deduction. Assets held in a grandparent-owned 529 plan do not affect financial aid, and since the 529 plan distribution was taken after the student graduated, there is nothing to report on the FAFSA. 529 Plan State Tax BenefitsYour state may offer an income tax deduction or tax credit for 529 plan contributions. If your state does not conform with the federal law, 529 plan distributions used to pay student loans and apprenticeship costs may be considered non-qualified.

Source: Forbes December 22, 2019 00:22 UTC