"I didn't ever intend to repay the $5k loan with the $30k withdrawal."

Exactly; yet, that's the only reason you are entitled to Tax Free withdrawal from a 529 plan account = for school expenses. So, if you didn't pay them with the 529 funds, you paid them with the loan that you used to justify the withdrawal of the 529 funds. Then, you didn't use them like that. That doesn't absolve you of the facts, and that doesn't open the door to a Second benefit of writing off school loan interest in addition to having made that withdrawal tax free.

"I withdrew the $30k because I had education expenses of $30k."

I? Are you not a tax preparer asking about your Client's scenario?

You stated this: "Assume the entire $30k would qualify for a nontaxable withdrawal from a 529 account."

It isn't clear what you are trying to accomplish. You can't get Double Benefit from anything here.

You seem to be lost on the internet.

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