After Graduation
You can repay a sibling’s student loans up to $10,000 as well.
You may pay up to $10,000 of principal and interest on qualified education loans for any sibling of the beneficiary (including step-siblings). The limit is an aggregate lifetime limit per individual (beneficiary or sibling), from all 529 accounts.
Again, the tax deduction for qualified education loan interest will be reduced by the amount of the repayment withdrawal.
Sam has two graduate sons. Son A received a scholarship and did not use his full 529 balance for school. Son B has $15,000 in student loans remaining. Sam can use the balance of Son A’s account to pay off up to $10,000 of the loans of sibling Son B.
No statement or example on this site should be considered a specific recommendation for your personal situation. Investing and tax strategies each carry significant risks. Examples herein may not apply to your situation. Please consult your estate attorney, tax advisor, or financial advisor for personal advice.