Zack McKerley began college last year and is in the process of applying again for financial aid for his third year of college. Zack received some distributions from various sources to pay for his expenses in his rst year. Which one of the following distributions that occurred last year will not hav...
Zack McKerley began college last year and is in the process of applying again for financial aid for his third
year of college. Zack received some distributions from various sources to pay for his expenses in his rst
year. Which one of the following distributions that occurred last year will not have an adverse effect on
the financial aid that Zack may receive in the coming year? - correct answer A
qualified distribution from a 529 Savings Plan that was funded with a transfer from Howard's UTMA
account.
Which of the following statements are true regarding front-loading of annual gift tax exclusions?
STATEMENT ONE: The only type of account that can be front-loaded with 5 years of annual exclusion
gifts is a Section 529 Savings Plan. STATEMENT TWO: The full amount of gifts placed in a front-loaded
account will be immediately excluded from the donor's gross estate for estate tax purposes. - correct
answer 1 only.
Which of the following statements, if any, are correct? STATEMENT ONE: Grants are money provided to
students that does not require repayment. STATEMENT TWO: A Federal Pell Grant is need-based nancial
aid specically for students who have already received an undergraduate degree and are pursuing a
graduate degree. - correct answer 1 only.
Which of the following is not a repayment method for a Stafford Loan? - correct answer
Success Repayment.
Which of the following is a qualified education expense for the purpose of tax-free scholarships? -
correct answer Textbooks.
Which of the following statements, if any, is (are) correct? STATEMENT ONE: Prepaid Tuition plans
provide for the prepayment of college tuition at current tuition prices (or current tuition prices plus a
small premium) for future enrollment. STATEMENT TWO: A disadvantage of a QTP (qualified tuition
plan) is that the owner / contributor must relinquish control of the account and share control of the
funds with the student / beneficiary. - correct answer 1 only.
Jody would like to plan for her daughter's college education. She would like for her daughter, who was
born today, to attend college for 5 years, beginning at age 18. Tuition is currently $12,000 per year and
tuition inflation is 6%. Jody can earn an after-tax rate of return of 8%. How much must Jody save at the
, end of each year, if she wants to make the last payment at the beginning of her daughter's first year of
college? - correct answer $4,406.75.
Harvey would like to plan for his son's college education. He would like for his son, who was born today,
to attend college for 4 years, beginning at age 18. Tuition is currently $10,000 per year and tuition
ination is 7%. Harvey can earn an after-tax rate of return of 10%. How much must Harvey save at the
end of each year, if he wants to make the last payment at the beginning of his son's first year of college?
- correct answer $2,845.81.
Which of the following statements, if any, are correct? STATEMENT ONE: The Automatically Assessed
Formula for determining the Expected Family Contribution (EFC) requires that the student or parent's
AGI is less than $50,000. STATEMENT TWO: The Simplified Method for determining Expected Family
Contribution (EFC) does not consider the family's assets in its formula. - correct answer
2 only.
Which of the following is/are true regarding 529 Savings Plans?
1. Qualified distributions from a 529 plan can be used to pay for a computer.
2. There are no income limitations (phase-outs) on who can contribute to a 529 Savings Plan.
3. A federal income tax deduction is not permitted for contributions to a 529 Savings Plan.
4. All of the above. - correct answer All of the above.
Johnny and June would like to begin saving for their children's college education. They have four kids,
ages 1, 5, 11, and 14. Each child will begin college at 18 and attend a private university for four years.
Tuition is currently $22,000 per year and is increasing at 4% per year. They can earn an after-tax rate of
return of 9%. How much must they save at the end of each year if they would like to make the last
payment at the beginning of their youngest child's last year of college? - correct answer
$22,868.
Which of the following statements will have the MOST negative impact on need-based financial aid? -
correct answer The balance in an UGMA account.
A family of four with total income of $45,000 and two students in college will likely qualify for which of
the following? ONE: Pell grant. TWO: Subsidized Stafford loan. THREE: PLUS loan. - correct answer
1, 2, and 3.
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