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Planning Beginner: Education Planning

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1.
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.
2.
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.
3.
To qualify for financial aid, a family must pass a needs test, which would consider _______.
Choose wisely. There is only one correct answer.
All of the above. A needs test would look at all of these elements.
4.
If you are a dependent student when filling out the FAFSA, your student aid index depends solely upon your family income.
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False. The index depends on other factors as well, such as assets.
5.
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.
6.
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.
7.
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.
8.
A veteran of the US armed forces qualifies as an independent student.
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True. Veterans are treated as independent for financial aid purposes.
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.
Competition among colleges lowers the cost of tuition.
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False. Competition actually raises the cost of tuition because colleges must spend money to woo prospective students.
11.
The maximum amount that each donor can contribute to a Coverdell education savings account is always $2000 per year.
Choose wisely. There is only one correct answer.
False. The amount that can be contributed depends upon several factors, including adjusted gross income of the donor and the amount others have already contributed toward the beneficiary's $2000 limit for the year.