It doesn't have to be "repaid in the year borrowed."
It just has to be taken from the 529 in the year the expenses are incurred. You could invest it or leave it in cash until you are ready to repay the loan.
Essentially, you can take money out of a 529, any year, equal to educational expenses incurred that year. It doesn't really matter what you do with the money when you take it out. But no, you can't take money out of a 529 plan, penalty free, for the sole purpose of repaying a student loan.
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