If the 529 distribution is totally used for qualified expenses (such as room & board), it does not matter whether the distribution goes to the student or parent, as none of it is taxable. There might be a slightly less chance of an audit, if it goes to the student and his lower tax bracket.
If some of the distribution is taxable (see example above), the student is usually in a lower tax bracket, unless he is is subject to the 'kiddie tax". But, the only way to be sure, is prepare returns both ways and compare.
