Naturally - then again, the same applies to any family income that is counted: considered income and taxable!?
I was simply wondering out loud, whether the once-reasonable presumption “question is for informational purposes” might possibly have changed, once that “penalty” hurdle had been removed. Without the penalty when used for Higher-Education expenses, IRA/Roth IRAs would become equivalent to any other investment assets (even if the intended savings were originally meant for retirement) - similar to anyone who is not covered by a 401k and was not eligible to make IRA contributions, may have “intended” certain investment portfolios for long-term retirement savings.
I don’t know, or assert, either way. But, if the law makers’ intention was to “unlock” IRAs precisely so that one COULD afford to pay for college, it wouldn’t be a huge leap for colleges to follow that lead. Frankly, If I had to decide how to most fairly distribute a limited amount for financial awards, it would be quite reasonable to treat a family with $50,000 in their IRA different than a family with $2,000,000, now that the law explicitly designates these funds as usable for college tuition (after taxes).