BUSI 352 quiz 4 Education Planning solutions complete answers

BUSI 352 quiz 4 Education Planning solutions complete answers 

 

Which of the following loans will likely be available to pay for college expenses for the children of parents with a good credit history and low debt-to-income ratio? ONE: Parent PLUS loan. TWO: HELOC. THREE: Life insurance cash value loan. FOUR: 401(k) loan.

 

Frank and Miranda education expenses of $2,800 for her son, Luke. How much of an American Opportunity Tax Credit (AOTC) is Amy entitled to this year?

 

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 financial aid specifically for students who have already received an undergraduate degree and are pursuing a graduate degree.

 

Which of the following is/are true regarding 529 Savings Plans?

 

Frank and Miranda would like to plan for their son’s college education. They would like their son, who was born today, to attend a private university for 4 years beginning at age 18. Tuition is currently $70,000 per year and has increased at an annual rate of 6%, while inflation has only increased at 3% per year. They can earn an after-tax rate of return of 8%. 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 son’s first year of college?

 

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?

 

Which of the following education funding techniques will be most appropriate to recommend to parents with incomes over $200,000?

 

Phillip wants to save for his son’s education. Tuition costs $10,000 per year in today’s dollars. His son was born today and will go to school starting at age 18. He will go to school for 4 years. Phillip can earn 12% on his investments and tuition inflation is 6%. How much must Phillip save at the end of each year if he wants to make his last savings payment at the beginning of his son’s first year of college?

 

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.

 

Mr. Flannigan has come to you for advice on financing his son’s college education at a state university. Even though his income exceeds $200,000, he has not saved enough for his college expenses. You advise him that his best opportunity to acquire education funds would be through:

 

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?

 

All of the following are true regarding EE Savings Bonds used for education expenses except?

 

Which of the following statements will have the MOST negative impact on need-based financial aid?

 

Which of the following student loan repayment plans provides for a recalculation each year of the amount of payment based on income and family size?

 

Which of the following is not a repayment method for a Stafford Loan?

 

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.

 

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.

 

Ronnie is the custodian of his son Arthur’s Section 529 plan.  If Ronnie withdraws funds from the 529 plan to pay for plane tickets for Ronnie and Arthur to tour colleges, which of the following is true?

 

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 first 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?

 

Johnny has an undergraduate degree and has decided to go back to school to pursue a graduate degree. He has incurred $6,500 in qualified expenses this year. What is the maximum Lifetime Learning Credit Johnny can take this year?

 

Phillip wanted to save for his son’s education. Tuition costs $10,000 per year in today’s dollars. His son was born today and will go to school starting at age 18. He will go to school for 4 years. Phillip can earn 12% on his investments and tuition inflation is 6%. How much must Phillip save at the beginning of each year if he wants to make his last savings payment at the beginning of his son’s first year of college?

 

Which of the following is a qualified education expense for the purpose of tax-free scholarships?

 

All of the following statements concerning education funding are correct EXCEPT:

 

Which one of the following statements is NOT correct?

 

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 inflation 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?

 

What is the total American Opportunity & Lifetime tax credit the Jones family can take, given the following information? - Marsha is a sophomore and incurs $5,000 in education expenses. - Andrew is in grad school and incurs $7,000 in education expenses. - Dad, who has a 4-year degree, goes back to school and incurs $4,000 in education expenses.

 

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.

 

Which of the following is/are true regarding PLUS Loans?