Hardship withdrawals from 401(k)s can be used to pay for tuition and related educational expenses. However, hardship distributions from traditional retirement accounts taken by people under age 59½ are subject to a 10 percent early withdrawal penalty in addition to income tax on the amount withdrawn. worker in the 25 percent tax bracket who withdrawals $10,000 from an IRA for college expenses will owe $2,500 in federal income tax on the distribution. However, if the money is withdrawn from a Roth IRA before age 59½, income tax will be due only on the portion of the withdrawal that comes from investment earnings.