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Planning Beginner: Education Planning

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1.
With regard to financial aid, the "income protection allowance" is for the basic living expenses of a family.
Choose wisely. There is only one correct answer.
True. The income protection allowance keeps a certain amount of money out of the financial aid calculation for this very purpose.
2.
All of the following are qualified educational expenses for tax-free withdrawals from a Coverdell account except _______.
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Transportation expenses. Transportation expenses are not qualified educational expenses.
3.
Home schools do not receive taxpayer funds.
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True. As such, families must pay for them on their own.
4.
Need-based financial aid is a loan that must be repaid.
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False. While most need-based financial aid is in the form of loans, there are scholarships and work-study programs as well.
5.
You should not apply for financial aid for college if your family income is more than _______.
Choose wisely. There is only one correct answer.
None of the above. Since need-based aid considers other factors besides family income, you may apply if you think you need it, regardless of your income.
6.
With regard to the FAFSA, the student aid index (SAI) is used to _______.
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Determine federal student aid. The SAI is an eligibility index used for that purpose.
7.
Pre-paid 529 tuition plans may be purchased with _______.
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Either of the above. You may purchase them with either method.
8.
What is the cutoff age for independent student status?
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24. This is the cutoff age.
9.
In order to qualify for financial aid for college, a family must have an income less than $35,000 per year.
Choose wisely. There is only one correct answer.
False. Financial needs tests consider not only income and assets, but education costs, too.
10.
With hundreds of millions of dollars in unclaimed scholarships, it is usually worthwhile to pay a fee to find scholarships that match your profile.
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False. It rarely is ever worth the cost in time, effort, and dollars to pursue these; furthermore, the information is available free.
11.
As a rule, the cost of college tuition is rising faster than inflation.
Choose wisely. There is only one correct answer.
True. Currently, tuition costs are rising more than twice as fast as inflation.