Hardship withdrawals for post-secondary education

[Guest Elinor]

I would like input regarding how employers administer the "tuition reimbursement" safe harbor hardship reason under 401(k). Specifically:

-- Do you limit withdrawals to 'college' courses?

-- If you do not restrict to college courses, do you require proof that the course requires a high school diploma? Or that the course results in some sort of "certification"?

-- Any other criteria requried? For example, is payment for cosmetology course or dog grooming approved?

Thanks

Elinor

[Guest Bud]

We don't limit to college courses or require a high school diploma. We grant hardships if the participant can prove that school participates in student aid programs administered by the federal Department of Education. We also ask whether the employee exhausted student aid from the school before granting the hardship. We're a large plan (greater than 30,000)

[E as in ERISA]

That would be consistent with how the IRS defines an eligible postsecondary institution in a lot of other contexts. See Pub 970 at http://www.irs.gov/pub/irs-pdf/p970.pdf.