Question 1

What percentage of a student's net worth is considered to be available to pay education expenses?

Accepted Answer

A) 0% 
B) 12% 
C) 35% 
D) 50% 
A) 0% 
B) 12% 
C) 35% 
D) 50% C

Question 2

What formula should you use to determine the future cost of a year of college?

Accepted Answer

A) Present cost of attendance X # of years of attendance 
B) FV = PV (1+G)^N 
C) PVGA = (PMT/(I-G))*(1-((1+G)/(1+I))^N) 
D) FVA = (PMT/I)*((1+I)^N-1) 
A) Present cost of attendance X # of years of attendance 
B) FV = PV (1+G)^N 
C) PVGA = (PMT/(I-G))*(1-((1+G)/(1+I))^N) 
D) FVA = (PMT/I)*((1+I)^N-1) B

Question 3

Which type of student loan has an interest rate of 5%?

Accepted Answer

A) Federal Perkins loan 
B) Parent PLUS loan 
C) Graduate PLUS loan 
D) Private loans 
A) Federal Perkins loan 
B) Parent PLUS loan 
C) Graduate PLUS loan 
D) Private loans A

Question 4

Which of the following is true regarding a Coverdell Education Savings Account?

Accepted Answer

A) The beneficiary must be the taxpayer 
B) The beneficiary must be under the age of 21 
C) The total balance in the account must be withdrawn before the beneficiary's 30th birthday 
D) You cannot contribute more than $2,000 each tax year 
A) The beneficiary must be the taxpayer 
B) The beneficiary must be under the age of 21 
C) The total balance in the account must be withdrawn before the beneficiary's 30th birthday 
D) You cannot contribute more than $2,000 each tax year

Question 5

When planning for education financing, what should you NOT do?

Accepted Answer

A) Consider student loans 
B) Consider scholarships 
C) Under-prioritize educational goals 
D) Over-prioritize educational goals 
A) Consider student loans 
B) Consider scholarships 
C) Under-prioritize educational goals 
D) Over-prioritize educational goals

Question 6

What is the second step in determining a client's goals for education?

Accepted Answer

A) Determine education goals 
B) Create strategies to fund education goals 
C) Analyze the current financial situation and education funding plan 
D) Educate the client on implementing education funding plans 
A) Determine education goals 
B) Create strategies to fund education goals 
C) Analyze the current financial situation and education funding plan 
D) Educate the client on implementing education funding plans

Question 7

Besides the Federal government, what type of organization may offer loans to pay for education?

Accepted Answer

A) The college 
B) Non-profit organizations 
C) Private organizations 
D) All of the above 
A) The college 
B) Non-profit organizations 
C) Private organizations 
D) All of the above

Question 8

What is the amount of additional tax on traditional or Roth IRA withdrawals, made before age 59 ½, that are NOT used for qualified higher education expenses (or another qualified expense)?

Accepted Answer

A) 3% 
B) 5% 
C) 10% 
D) 15% 
A) 3% 
B) 5% 
C) 10% 
D) 15%

Question 9

What is a disadvantage of a Crummey Trust?

Accepted Answer

A) Distributions used for education are considered as income to the student's parent 
B) Distributions used for education are considered as income to the student 
C) The trust can have multiple beneficiaries 
D) The trust allows the parent or another person who sets it up to have some control over distributions 
A) Distributions used for education are considered as income to the student's parent 
B) Distributions used for education are considered as income to the student 
C) The trust can have multiple beneficiaries 
D) The trust allows the parent or another person who sets it up to have some control over distributions

Question 10

On which type of loan does the Federal government pay interest while the student is attending school?

Accepted Answer

A) Subsidized Stafford loan 
B) Unsubsidized Stafford loan 
C) Federal Perkins loan 
D) All of the above 
A) Subsidized Stafford loan 
B) Unsubsidized Stafford loan 
C) Federal Perkins loan 
D) All of the above

Question 11

How do you find the amount of financial aid a student may be eligible to receive?

Accepted Answer

A) By filing a form with the student's income tax return 
B) Free Application for Federal Student Aid 
C) Expected Family Contribution Aid Request 
D) Free Application for State Financial Aid 
A) By filing a form with the student's income tax return 
B) Free Application for Federal Student Aid 
C) Expected Family Contribution Aid Request 
D) Free Application for State Financial Aid

Question 12

How do most full-time undergraduate students pay for a college education?

Accepted Answer

A) Financial aid 
B) Gifts from parents 
C) Scholarships 
D) Education savings vehicles 
A) Financial aid 
B) Gifts from parents 
C) Scholarships 
D) Education savings vehicles

Question 13

Which of the following is NOT considered when using the regular formula to figure the Expected Family Contribution?

Accepted Answer

A) Dependency status 
B) Number of children in college 
C) Household size 
D) Family business 
A) Dependency status 
B) Number of children in college 
C) Household size 
D) Family business

Question 14

What is the maximum American Opportunity Tax Credit amount?

Accepted Answer

A) $2,000 
B) $2,500 
C) $5,000 
D) $10,000 
A) $2,000 
B) $2,500 
C) $5,000 
D) $10,000

Question 15

Of the following, what should you never use as a strategy for educational goals?

Accepted Answer

A) Work-study programs 
B) Savings vehicles 
C) Grants 
D) None of the above 
A) Work-study programs 
B) Savings vehicles 
C) Grants 
D) None of the above

Question 16

Which of the following is a savings strategy for future education?

Accepted Answer

A) Student loans 
B) 925 College Savings Plan 
C) Scholarship 
D) Variable Universal Life Insurance 
A) Student loans 
B) 925 College Savings Plan 
C) Scholarship 
D) Variable Universal Life Insurance

Question 17

What is an advantage of a 529 College Savings Plan?

Accepted Answer

A) Earnings withdrawn from a 529 College Savings Plan are never taxed 
B) Though earnings withdrawn from a 529 College Savings Plan are always taxed, you can deduct contributions while saving 
C) Earnings withdrawn from a 529 College Savings Plan are not taxed, as long as they are used for qualified education expenses 
D) Only half the earnings withdrawn from a 529 College Savings Plan are taxed 
A) Earnings withdrawn from a 529 College Savings Plan are never taxed 
B) Though earnings withdrawn from a 529 College Savings Plan are always taxed, you can deduct contributions while saving 
C) Earnings withdrawn from a 529 College Savings Plan are not taxed, as long as they are used for qualified education expenses 
D) Only half the earnings withdrawn from a 529 College Savings Plan are taxed

Question 18

If a client has a child, what should you assume about the child's education?

Accepted Answer

A) The child will go to a four-year college or university 
B) The child will not attend college or a trade school 
C) The child will receive a scholarship or otherwise fund his or her own education 
D) Assume nothing 
A) The child will go to a four-year college or university 
B) The child will not attend college or a trade school 
C) The child will receive a scholarship or otherwise fund his or her own education 
D) Assume nothing

Question 19

How do loans differ from grants?

Accepted Answer

A) Grants must generally be paid back 
B) Grants are generally based on financial need, but loans are typically not based on need 
C) Grants are awarded to the parent, where loans are awarded to the student 
D) Grants are awarded to the student, where loans are typically only awarded to the parent 
A) Grants must generally be paid back 
B) Grants are generally based on financial need, but loans are typically not based on need 
C) Grants are awarded to the parent, where loans are awarded to the student 
D) Grants are awarded to the student, where loans are typically only awarded to the parent

Question 20

Who prepares the financial aid package available to the student?

Accepted Answer

A) U)S. Department of Education 
B) The state in which the student lives 
C) The parent 
D) The school 
A) U)S. Department of Education 
B) The state in which the student lives 
C) The parent 
D) The school

What percentage of a student's net worth is considered to be available to pay education expenses?

What formula should you use to determine the future cost of a year of college?

Which type of student loan has an interest rate of 5%?

Which of the following is true regarding a Coverdell Education Savings Account?

When planning for education financing, what should you NOT do?

What is the second step in determining a client's goals for education?

Besides the Federal government, what type of organization may offer loans to pay for education?

What is the amount of additional tax on traditional or Roth IRA withdrawals, made before age 59 ½, that are NOT used for qualified higher education expenses (or another qualified expense)?

What is a disadvantage of a Crummey Trust?

On which type of loan does the Federal government pay interest while the student is attending school?

How do you find the amount of financial aid a student may be eligible to receive?

How do most full-time undergraduate students pay for a college education?

Which of the following is NOT considered when using the regular formula to figure the Expected Family Contribution?

What is the maximum American Opportunity Tax Credit amount?

Of the following, what should you never use as a strategy for educational goals?

Which of the following is a savings strategy for future education?

What is an advantage of a 529 College Savings Plan?

If a client has a child, what should you assume about the child's education?

How do loans differ from grants?

Who prepares the financial aid package available to the student?

Education Planning

Estate Planning

Estate Planning

General Principles of Financial Planning

General Principles of Financial Planning

Investment Planning

Investment Planning

Professional Conduct and Regulation

Professional Conduct and Regulation

Retirement Savings and Income Planning

Retirement Savings and Income Planning

Risk Management and Insurance Planning

Risk Management and Insurance Planning

Tax Planning

Tax Planning

Filters

Exam 1: Education Planning

What percentage of a student's net worth is considered to be available to pay education expenses?

What formula should you use to determine the future cost of a year of college?

Which type of student loan has an interest rate of 5%?

Which of the following is true regarding a Coverdell Education Savings Account?

When planning for education financing, what should you NOT do?

What is the second step in determining a client's goals for education?

Besides the Federal government, what type of organization may offer loans to pay for education?

What is the amount of additional tax on traditional or Roth IRA withdrawals, made before age 59 ½, that are NOT used for qualified higher education expenses (or another qualified expense)?

What is a disadvantage of a Crummey Trust?

On which type of loan does the Federal government pay interest while the student is attending school?

How do you find the amount of financial aid a student may be eligible to receive?

How do most full-time undergraduate students pay for a college education?

Which of the following is NOT considered when using the regular formula to figure the Expected Family Contribution?

What is the maximum American Opportunity Tax Credit amount?

Of the following, what should you never use as a strategy for educational goals?

Which of the following is a savings strategy for future education?

What is an advantage of a 529 College Savings Plan?

If a client has a child, what should you assume about the child's education?

How do loans differ from grants?

Who prepares the financial aid package available to the student?

Education Planning

Estate Planning

Estate Planning

General Principles of Financial Planning

General Principles of Financial Planning

Investment Planning

Investment Planning

Professional Conduct and Regulation

Professional Conduct and Regulation

Retirement Savings and Income Planning

Retirement Savings and Income Planning

Risk Management and Insurance Planning

Risk Management and Insurance Planning

Tax Planning

Tax Planning

Filters