If you have children or grandchildren, you might be thinking about investing in a tax-advantaged 529 college savings plan.
But now, you may have even more reason to consider one.
Thanks to recent legislation, you can now potentially use up to $10,000 from a 529 account to repay federal and most private student loans taken out by the beneficiary you’ve named – your child or grandchild.
Of course, you may end up using all your 529 funds just to pay those college bills, which can be quite high. But if you have several children, each with a 529 plan, and one of them attends a less expensive school and doesn’t need the full amount in their plan, you could use the money to help pay off some of the other siblings’ student debts.
Consult with your tax advisor before using a 529 plan to pay off student loans, though, as some states may disallow tax benefits if the money is used in this way.
Nonetheless, a 529 plan has always been a good college-funding tool – and now it’s gotten even better.
This article was written by Edward Jones for use by your local Edward Jones Financial Advisors, Brent D. Hoskinson and Linda Drake.