Q. The scenario: student withdrew $20,000 of unsubsidized government loans. $14,770 was used to pay student's tuition in January 2025. Can the 529 be used to reimburse the student-beneficiary's qualified educational expense of $14,770?
A. It does not matter when the student received the LOAN money, in 2024 or 2025 (it might matter if it was scholarships, not loans). If he paid 2025 tuition, in 2025, he can take a 529 distribution, in 2025, for reimbursement and it still counts as a qualified distribution.
If he didn't get around to paying off 2024 tuition, until 2025, then the answer is different.
But, all of that is academic, in this situation, as apparently, the student is not the beneficiary.
