Coverdell education savings accounts cannot be used to repay student loans.
What can ESA funds be used for?
What can an ESA be used for? One big benefit of ESAs is the wide range of eligible education expenses allowed under the law. ESA funds can be used to pay not only for college tuition but also K-12 education expenses, room and board, books and supplies, tutoring, transportation, computers, and even internet access.
What are qualified education expenses for a Coverdell?
How does a Coverdell education savings account work?
In general, the designated beneficiary of a Coverdell ESA can receive tax-free distributions to pay qualified education expenses. The distributions are tax-free to the extent the amount of the distributions doesn’t exceed the beneficiary’s qualified education expenses.
What do you need to know about qualified education expenses?
It’s also possible to pay for books, equipment, supplies or even to buy a computer with tax-free Coverdell ESA distributions. The qualified education expenses must relate to the enrollment or attendance of the designated beneficiary at an eligible education institution.