Hardship Withdrawal

[J2D2]

Participant has requested a hardship withdrawal for tuition and room & board. OK with tuition, but the room & board request is for an off-campus apartment. So far, I've not found anything that discusses whether room & board is restricted to campus housing. I can see one rationale for such a restriction - these expenses are charged up-front and are known in advance. On the other hand, apartment rent is also set up-front; but who knows how much a college student will eat over the next academic year.

Has anyone had to address this question?

[Belgarath]

Facts and circumstances and "reasonableness." Only time I've actually seen this, the Plan Administrator had the participant submit documentation from the educational institution as to the cost of room and board, and determined that any off-campus room and board that was equal to or less than this amount would be an acceptable amount for hardship purposes. I'm sure other reasonable approaches could be found.

Now, I could easily envision a situation where an even larger amount could be acceptable. Suppose, for example, that campus housing is full, so the student has no choice except to live off campus. Depending upon the price of apartment rentals, it could be higher than on-campus housing. Again, some sort of "resonable" assumptions, including a signed statement from the participant, would probably need to be considered. A luxury penthouse with domestic servants might be a bit hard to justify...

[masteff]

Just to add a specific thought to Belgrath's answer...

We commonly accepted the estimate of costs that most campus financial aid offices can provide (if it's good enough for federal student loans and grants, ought to be good enough for a hardship w/drwl). The financial aid office should have several sets of estimates... one of which is specifically for students in off-campus housing. Have your participant contact the financial aid office and request this. Then, since you'll have access to a copy of the apartment lease, you can adjust the amount accordingly.