Some federal student loan holders may be able to tap into 529 plans for help when payments restart

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A fairly recent change to 529 plans that allows limited withdrawals for student debt may be especially appealing with the payments soon scheduled to restart.

These are the 10 best countries in the world for business, social purpose and more—the U.S. isn't in the top 3The reality is, of course, that most college students who graduate with student debt won't actually have money remaining in their college savings plan,However, it's possible a college graduate with student debt has a sibling with remaining funds in their 529 plan, Kantrowitz saidPerhaps they went to a lower-cost college or won a scholarship," he said.

"But, there's something to be said for simplifying one's finances and the freedom that comes with having paid off debt," Kantrowitz said. The investment accounts can be used to pay for all federal student loans, and most private student loans also qualify, said Elaine Rubin, director of corporate communications atAlthough borrowers won't be dinged with federal taxes on their eligible 529 withdrawal, they may face state taxes, Rubin added.

 

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