Qualified higher education loan under retirement plan

[Theresa Lynn]

I would like your thoughts on this--

Have any of you had an employee request a loan under a 401(k) or other retirement plan specifically (and exclusively) to pay qualified higher education expenses? If so, have you been requesting a Form W-9S and then maintaining and filing the loan information normally required for those types of loans? Do you provide a special rate for the loan since often student loans are offered at a lesser rate? Should it make any difference if the loan is an allocated investment of the borrower (so the lower interest rate is fiduciarily more appropriate)? What about any other special requirements relating to student loans--what else should we be concerned about?

Thanks

Theresa Lynn

[Guest Rudy]

Even though the loan is to pay for educational expenses, it is NOT A STUDENT LOAN. It is a loan from a qualified retirement plan. The loan should be treated no differently than other loans from this plan.