Penalty-free withdrawals from regular IRAs can be made to pay for undergraduate or graduate qualified higher education expenses for the taxpayer, the taxpayer’s spouse, or the child or grandchild of the taxpayer or taxpayer’s spouse at an eligible educational institution. The taxpayer will owe federal income tax on the amount withdrawn, but will not be subject to the 10% early withdrawal penalty (imposed when amounts are withdrawn from an IRA before the taxpayer reaches age 59