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Planning Beginner: Education Planning

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1.
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.
2.
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.
3.
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.
4.
You should apply early for grants and scholarships because _______.
Choose wisely. There is only one correct answer.
They are awarded on a first-come, first-served basis.
5.
Educational expenses used as the basis for a tax-free withdrawal from a Coverdell education savings account cannot be used toward other education deductions or credits on the 1040 tax form.
Choose wisely. There is only one correct answer.
True. One generally cannot take a deduction or credit for any educational expenses used as the basis for a tax-free withdrawal from a Coverdell account.
6.
College tuition costs rise for several reasons. Which of the following is not one of these reasons?
Choose wisely. There is only one correct answer.
Too many students wanting to get in. Regarding students, it is a shortage rather than a surplus that contributes to tuition increases.
7.
Why are scholarship search firms so frequently full of empty promises?
Choose wisely. There is only one correct answer.
All of the above. These are all reasons why going to a scholarship search firm is often fruitless.
8.
Pre-paid 529 tuition plans may be purchased with _______.
Choose wisely. There is only one correct answer.
Either of the above. You may purchase them with either method.
9.
Generally, which type of student may omit questions on the FAFSA that refer to parents' income?
Choose wisely. There is only one correct answer.
Independent students. Independent students will not need to provide that information.
10.
All of the following need to be considered when planning for your child's education except _______.
Choose wisely. There is only one correct answer.
None of the above are exceptions. Education planning should be part of your overall financial planning strategy.
11.
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.
Choose wisely. There is only one correct answer.
False. You can use estimated tax information when filling out a financial aid form, and then amend it later on.