Pay down student debt smarter
Families can now use their 529 savings to help pay off qualified student loans. Each student (beneficiary), or their sibling, can use up to $10,000 in lifetime repayments. Using your 529 account this way may help reduce debt while keeping long-term financial goals on track.
Why use a 529 account for student loan repayment?
Pay down debt directly
529 savings can be applied toward the principal or interest of qualified student loans, helping reduce the overall debt burden and save on interest over time.
Flexibility across family members
Funds can be used for the student (beneficiary) or their siblings, offering financial relief where it’s needed most.
Simplified repayment
Using a 529 account for student loans is a straightforward way to make payments without taking on additional debt or loans, helping families stay on top of education costs.
How 529s can be used for student loan repayment
What’s covered
Principal and interest on qualified student loans for the account owner or eligible family members
Federal and private student loans that are qualified under federal law
Payments toward loans of up to $10,000 per student (per IRS rules)
What’s not covered
Penalties and fees for late payments
Loan repayments exceeding the $10,000 per-beneficiary limit
Non-qualified personal loans and credit card debt used to pay education costs
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