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Planning Beginner: Education Planning

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1.
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.
2.
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.
3.
With hundreds of millions of dollars in unclaimed scholarships, it is usually worthwhile to pay a fee to find scholarships that match your profile.
Choose wisely. There is only one correct answer.
False. It rarely is ever worth the cost in time, effort, and dollars to pursue these; furthermore, the information is available free.
4.
Which of the following two plans has higher contribution limits?
Choose wisely. There is only one correct answer.
529 plan. As a rule, 529 plans offer much higher contribution limits.
5.
With regard to the FAFSA, the student aid index (SAI) is used to _______.
Choose wisely. There is only one correct answer.
Determine federal student aid. The SAI is an eligibility index used for that purpose.
6.
With regard to filling out the FAFSA, parental assets include which of the following?
Choose wisely. There is only one correct answer.
All of the above. All of these are counted on the FAFSA.
7.
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.
8.
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.
9.
To qualify for financial aid, a family must pass _______.
Choose wisely. There is only one correct answer.
A needs test. A needs test considers not only family income and assets but also the total cost of education for all family members.
10.
What is the cutoff age for independent student status?
Choose wisely. There is only one correct answer.
24. This is the cutoff age.
11.
Need-based financial aid is a loan that must be repaid.
Choose wisely. There is only one correct answer.
False. While most need-based financial aid is in the form of loans, there are scholarships and work-study programs as well.