[hernandm21]

I am trying to get a hardship loan to pay for my daughters rental expenses food, utilities and transportation since she is in college. They are telling me that these do not qualify under post secondary education related expenses. Is this true? And if it is can io close out my 401k immediately without quitting my job?

[ebaines]

College tuition and expenses such as room and board or lab fees for your child are valid hardship expenses, meaning by IRS rules your employer must allow you to make a withdrawal for this purpose. Transportation costs are not recognized as hardship. However, you asked about a loan, not a withdrawal, and it's posible that your plan either doesn't have a loan provision or may have different rules for allowing loans as opposed to withdrawals. The plan administrator should be able to tell you what the rules for loans are. If they do have a loan provision, I'd be very surprised if they are more restrictive than for making withdrawals.

Keep in mind that if you take this withdrawal you will be liable for income taxes as well as the 10% early withdrawal penalty (assuming you are under 59-1/2 years of age). If you take the loan there are no taxes or penalties you have to pay (unless you leave your job or otherwise default).