If you take a distribution from a 529 plan and do not use the money for qualified education expenses, then the income earned on the funds is taxable. So, you are inferring that since the payments on a loan are not qualifying education expenses, distributions form the 529 plan used for that purpose would not qualify for special tax treatment.
The 529 bulletin, however, is referring to education expenses you can consider for purposes of qualifying for an education credit. You cannot pay on your student loans and use that as qualifying expenses for an education credit, but they are qualifying expenses for purposes of excluding your 529 plan distributions from taxation.
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