I'm the account owner and beneficiary of my 529. In 2023, I had $30,000 in Qualified Higher Education Expenses (tuition + fees). But $12,000 of those expenses were paid for via a federal loan that was disbursed directly to my school.
My question is: how much can I withdraw my 529 as a qualified withdrawal (no tax, no penalty)?
1. Can I only withdraw $18k, i.e., $30k minus the $12k loan amount?
2. Or can I withdraw the full $30k, even though $12k of my "expenses" were paid for directly by a loan?
3. Or could I even withdraw $40k – $30k in expenses plus $10k to pay off loan principle (subject to the $10k lifetime limit on loan payments from a 529)?
I hope that all makes sense. I cannot find guidance on this question anywhere. Thanks so much.
