Using your 529 to pay off debt
“Fun fact: as of 2019 up to $10,000 can be used to repay student loan debt of the beneficiary,” says Lewis. A law recently passed allowing one to use 529 savings to pay off some student debt without incurring the 10 percent penalty. Note, the limit for non-penalized withdrawals for this use is $10,000, per lifetime, per beneficiary. So, a family with three kids could withdraw up to $30,000 between them – $10,000 each – without paying a penalty.