IRA distributions for Sallie Loan payments
Can a parent under age 59 1/2 take a distribution from his/her IRA to make Sallie Mae loan payments and not be subject to the 10% pre-59 1/2 penalty?
The child is still in college and has qualified education expenses. The loan payments would not exceed these expenses.
Permalink Submitted by Alan - IRA critic on Mon, 2019-02-04 18:05
Yes, this should qualify for the penalty waiver for higher education expenses. If the higher education expenses paid qualify for a penalty exception, it does not matter what the IRA distribution is actually used for. The funds do not have to be traced between the IRA distribution and the payment of the higher education expenses.