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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.
You should apply early for grants and scholarships because _______.
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They are awarded on a first-come, first-served basis.
3.
Generally, which type of student may omit questions on the FAFSA that refer to parents' income?
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Independent students. Independent students will not need to provide that information.
4.
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.
5.
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.
6.
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.
7.
The chief factor in determining financial need is _______.
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The cost of education for all family members. Need is the biggest factor.
8.
When calculating the parental contribution to education costs, all of the parents' income is considered available.
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False. Various allowances are deducted from income to reach the amount that is considered available for spending on education.
9.
Which of the following two plans has higher contribution limits?
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529 plan. As a rule, 529 plans offer much higher contribution limits.
10.
Several factors qualify a student as an independent student. Which of the following is not one of them?
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Being engaged to be married. This is not one of them.
11.
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.