Eligible Expenses:
Series EE and I Savings Bonds may only receive the income tax exemption for amounts used to pay for tuition at Title IV colleges, universities, and vocational schools.Room, board, and books are not covered under the exemption. Withdrawals for these amounts will be subject to normal income tax.
Effect on Federal Financial Aid Eligibility:
Series EE and I Savings Bonds are considered assets of the parents if owned solely in a parent’s name, as is required for the exemption from tax. In this case, 5.64% of the current value of these bonds is expected to be contributed towards college costs each year.
