“Is it permissible to use my daughter’s 529 plan to pay off her student loans?”
As of January 1, 2020 the answer is now yes . . . sort of.
The SECURE Act allows for 529 Plan funds to pay $10,000 of student loans per student. Of course, many students have student loan burdens far higher than $10,000, but the Act does not address that issue.
Additionally, this tax free use of 529 Plan funds to pay down student loans is the limit for the lifetime of the student. Families are allowed to use 529 funds to pay $10,000 in student loan debt for each of their eligible children. This gives some additional relief to families with multiple student loan challenges.
So, not great, but certainly better than before when the answer was a flat no.
If you have questions or comments, please send them to Gene@AskMtM.com