Quiz Understanding the Financial Planning Certification Exam Part 1 Lesson 9
1. What is the primary determinant of eligibility for Pell Grants?
a) Completion of the FAFSA
b) Financial need
c) Academic performance
d) Family size
2. How are Pell Grants disbursed to students?
a) Direct deposit into student bank accounts
b) Payment to the educational institution
c) Check mailed to the student’s home address
d) Transfer to a Pell Grant account
3. Which program provides part-time employment opportunities to eligible undergraduate and graduate students with
financial need?
a) Pell Grant program
b) Roth IRA program
c) Federal work-study program
d) Coverdell accounts
4. What is the eligibility requirement for the federal work-study program?
a) Completion of the FAFSA
b) Minimum GPA requirement
c) Age limit
d) US citizenship
5. How are work-study earnings typically paid to students?
a) Direct deposit
b) Cash payments
c) University credit
d) Paychecks
6. What is the penalty for early withdrawal from a traditional IRA for educational expenses?
a) 5%
b) 10%
c) 15%
d) 20%
7. Under what conditions can early withdrawals from a Roth IRA for education expenses be penalty-free?
a) If the account is open for less than five years
b) If the account holder is under 21 years old
c) If the account holder is over 70 years old
d) If the account is open for at least five years
8. Which type of savings bond can be used to cover qualified education expenses?
a) Series HH bonds
b) Series I bonds
c) Series FF bonds
d) Series EE bonds
9. What is required to be eligible for tax exemptions on interest earned from savings bonds used for education
expenses?
a) Meeting specific income requirements
b) Completing the FAFSA
c) Obtaining a tax exemption form
d) Being enrolled in a federal financial aid program
10. How many full-time semesters can a student generally receive Pell Grants for?
a) 8
b) 10
c) 12
d) 15
11. Which government agency determines eligibility for Pell Grants?
a) IRS
b) Department of Education
c) Social Security Administration
d) Department of Treasury
12. What is the primary purpose of the federal Pell Grant program?
a) To provide scholarships for high achievers
b) To fund research projects at universities
c) To make college education more accessible
d) To support athletic programs at colleges
13. How is the award amount for a Pell Grant determined?
a) By academic performance
b) By demonstrated financial need
c) By family heritage
d) By standardized test scores
14. What does the federal work-study program aim to provide for students?
a) Full-time employment opportunities
b) Career counseling services
c) Part-time employment and work experience
d) Financial literacy workshops
15. What is the key advantage of a Roth IRA for education funding?
a) Tax-free growth potential
b) Higher interest rates
c) Guaranteed returns
d) No income limits
16. What type of education expenses can EE savings bonds cover?
a) Tuition only
b) Books and supplies only
c) Qualified education expenses
d) Room and board expenses
17. How can students exclude a portion of their work-study earnings from taxable income?
a) By filing a tax exemption form
b) By indicating interest in the program
c) By requesting a waiver from the IRS
d) By complying with federal tax laws
18. What is the maximum penalty-free withdrawal limit from an IRA for education expenses?
a) $5,000
b) $7,500
c) $10,000
d) $15,000
19. How long must a Roth IRA be open for penalty-free withdrawals for education expenses?
a) 2 years
b) 3 years
c) 5 years
d) 7 years
20. What documentation should individuals keep when using savings bonds for education expenses?
a) Bank statements
b) Receipts for tuition payments
c) Records of bond transactions and fund usage
d) IRS tax forms
Quiz Understanding the Financial Planning Certification Exam Part 1 Lesson 9
Answer Key:
1 What is the primary determinant of eligibility for Pell Grants?
b) Financial need
2 How are Pell Grants disbursed to students?
b) Payment to the educational institution
3 Which program provides part-time employment opportunities to eligible undergraduate and graduate students with
financial need?
c) Federal work-study program
4 What is the eligibility requirement for the federal work-study program?
a) Completion of the FAFSA
5 How are work-study earnings typically paid to students?
d) Paychecks
6 What is the penalty for early withdrawal from a traditional IRA for educational expenses?
b) 10%
7 Under what conditions can early withdrawals from a Roth IRA for education expenses be penalty-free?
d) If the account is open for at least five years
8 Which type of savings bond can be used to cover qualified education expenses?
d) Series EE bonds
9 What is required to be eligible for tax exemptions on interest earned from savings bonds used for education
expenses?
a) Meeting specific income requirements
10 How many full-time semesters can a student generally receive Pell Grants for?
c) 12
11 Which government agency determines eligibility for Pell Grants?
b) Department of Education
12 What is the primary purpose of the federal Pell Grant program?
c) To make college education more accessible
13 How is the award amount for a Pell Grant determined?
b) By demonstrated financial need
14 What does the federal work-study program aim to provide for students?
c) Part-time employment and work experience
15 What is the key advantage of a Roth IRA for education funding?
a) Tax-free growth potential
16 What type of education expenses can EE savings bonds cover?
c) Qualified education expenses
17 How can students exclude a portion of their work-study earnings from taxable income?
d) By complying with federal tax laws
18 What is the maximum penalty-free withdrawal limit from an IRA for education expenses?
c) $10,000
19 How long must a Roth IRA be open for penalty-free withdrawals for education expenses?
c) 5 years
20 What documentation should individuals keep when using savings bonds for education expenses?
c) Records of bond transactions and fund usage
End Of Quiz Understanding the Financial Planning Certification Exam Part 1 Lesson 9
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