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A Parent’s College Savings List – Part 3 Beneficiaries, Distributions & Qualified Expenses

Receiving a college education may be the single most important accomplishment that one may achieve in their entire life time.

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It’s vital to research college savings options carefully, just as you would research any investment opportunity. The following are a few of the many investment questions you should ask about each college savings option presented here:


What happens if the child dies or becomes disabled?
Can you change the beneficiary? Are there any restrictions on who can become the new beneficiary?

 Distributions and Qualified Expenses
  1. What happens if the child decides to not go to college?
  2. What happens if the child receives a scholarship from the school?
  3. Is access to the savings controlled by the account owner or the student? Are there any restrictions on how the money can be spent?
  4. Which schools participate in the plan? Do I have to name a particular school or set of schools when opening an account?
  5. What happens if the child goes to an out of state school? If the program is limited to public colleges, what happens if the child attends a private college?
  6. What expenses does the plan cover? Does it include just tuition and fees or does it also include room and board? Can you use the plan for non-included expenses, and if so, what are the penalties?
  7. Can the investment in the plan be cancelled? If so, how is the amount of the refund calculated?
  8. How do you redeem the plan or withdraw funds when your child matriculates in college?

Up Next : Part 4 Tax & Financial Aid Implications, Misc. Items