Can I use my ROTH IRA to pay off student loans

[vinnytin]

Can I use my ROTH IRA to pay off student loans without penalty? are there any special procedures when filing my next year's taxes if I am allowed to do so? Thanks!

[DanaB27]

No, paying off your student loan won't qualify for the exemption of the 10% early withdrawal penalty.

Please be aware, you can withdraw contributions you made to your Roth IRA anytime, tax- and penalty-free. If you withdraw more than your contributions (earnings) then you can be exempt from the 10% early withdrawal penalty if you use the distribution for qualified higher education expenses. 

1. Login to your TurboTax Account 
2. Click on "Search" on the top and type “1099-R” 
3. Click on “Jump to 1099-R” and enter all your 1099-Rs
4. Click "Continue" on the "Review your 1099-R info" screen
5. Answer all the questions and make sure you enter the net contributions prior to 2022 on the "Enter Prior Year Roth IRA Contributions" screen
6. Continue until "Did you use your IRA to pay for any of these expenses?" screen (this screen won't come up if you only withdrew your contributions) and enter the amount of qualified higher education expenses.

[vinnytin]

I spoke to the IRA broker and he's not being helpful, your input is appreciated. I want to expand on my situation, I contributed a grand total of $12,000 and my IRA balance went down to $11,000(bad markets).

If I draw up $11,000 or $12,000(my contribution) to pay off my remaining student loan balance, there will not be a penalty. 

Based on my research and what you have provided, the answer is no. I will not be subject to the 10% penalty. 

I just want to be sure that I understand this correctly. thanks for your patience.

[ThomasM125]

If you mean that you contributed $12,000 to your ROTH IRA and you lost $1,000, then you can withdraw the full balance of $11,000 and you will not be taxed or penalized on the withdrawal, since you will not have withdrawn any income. Also, if that is the only IRA account that you have and you withdraw the full balance, you can deduct the loss as an investment loss.