Planning Beginner: Education Planning

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1.
A 529 plan may be transferred to the beneficiary's _______.
Choose wisely. There is only one correct answer.
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.
2.
As a rule, the cost of college tuition is rising faster than inflation.
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True. Currently, tuition costs are rising more than twice as fast as inflation.
3.
You should not apply for financial aid for college if your family income is more than _______.
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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.
4.
To qualify for financial aid, a family must pass _______.
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A needs test. A needs test considers not only family income and assets but also the total cost of education for all family members.
5.
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.
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.
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.
8.
The maximum amount that each donor can contribute to a Coverdell education savings account is always $2000 per year.
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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.
9.
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.
10.
There are situations in which a student is allowed to not pay back his or her student loans.
Choose wisely. There is only one correct answer.
True. Taking certain jobs after graduation, such as in community service, can result in your student loans being forgiven.
11.
Home schools do not receive taxpayer funds.
Choose wisely. There is only one correct answer.
True. As such, families must pay for them on their own.