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Planning Beginner: Education Planning

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1.
Competition among colleges lowers the cost of tuition.
Choose wisely. There is only one correct answer.
False. Competition actually raises the cost of tuition because colleges must spend money to woo prospective students.
2.
A 529 plan may be transferred to the beneficiary's _______.
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Any of the above. Amounts in a 529 plan may be transferred tax-free to the 529 plan of another beneficiary who is a parent, sibling, or other relative specified in the code.
3.
To qualify for financial aid, a family must pass a needs test, which would consider _______.
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All of the above. A needs test would look at all of these elements.
4.
You should apply early for grants and scholarships because _______.
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They are awarded on a first-come, first-served basis.
5.
Why are scholarship search firms so frequently full of empty promises?
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All of the above. These are all reasons why going to a scholarship search firm is often fruitless.
6.
When filling out a financial aid form, an independent student _______ questions about parental income.
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May ignore. These questions are not relevant for independent students.
7.
If you can't fill out your tax form before April, when most grants and scholarships are taken, you are out of luck for applying for financial aid.
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False. You can use estimated tax information when filling out a financial aid form, and then amend it later on.
8.
All of the following are qualified educational expenses for tax-free withdrawals from a Coverdell account except _______.
Choose wisely. There is only one correct answer.
Transportation expenses. Transportation expenses are not qualified educational expenses.
9.
With regard to financial aid, the "income protection allowance" is for the basic living expenses of a family.
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True. The income protection allowance keeps a certain amount of money out of the financial aid calculation for this very purpose.
10.
The best time to start planning for your child's college education is when they enter secondary school.
Choose wisely. There is only one correct answer.
False. The best time to start planning for your child's college education is when you learn you're going to be a parent. The second best time is today.
11.
Several factors qualify a student as an independent student. Which of the following is not one of them?
Choose wisely. There is only one correct answer.
Being engaged to be married. This is not one of them.