• The purpose of your retirement plan is to give you a more financially secure future: The money in your account is meant to provide you with income during retirement. If you borrow money from the plan and do not repay it, you are risking your financial future.
• There are better ways to fund a college education: There are numerous ways to fund a college education today—including prepaid tuition plans (availability varies by state), U.S. savings bonds, home equity loans, Section 529 plans (which allow parents, relatives and friends to contribute to a tax-advantaged account earmarked for tuition expenses), scholarships and student loans. There are some excellent books on how to fund college expenses, including The Standard & Poor's Guide to Saving and Investing for College (by David J. Braverman) and The Best Way to Save for College: A Complete Guide to 529 Plans (by Joseph F. Hurley). Of course, the Internet is also an excellent resource for college funding information and ideas.
• Other college funding/loan options have tax advantages that your plan can’t offer: For example, you can ordinarily withdraw money from a Section 529 tax free, subject to compliance with plan provisions. U.S. savings bonds may be subject to tax-advantaged treatment. In addition, the interest you pay on a home equity loan may be tax deductible, as is some student loan interest. The interest you pay when you borrow from your retirement plan isn’t deductible.
• If you lose your job, you may have to pay off your loan in a lump sum: Many plans have this provision, and if you cannot repay your loan within the time stipulated, the unpaid portion of your loan will be treated as a withdrawal from the plan. If this happens, you will have to pay ordinary income taxes on the money you did not repay—and possibly an additional 10% penalty, as required by the IRS.
• The money that you borrow is not working for your financial future: If the money you borrow from your plan account was invested in equity or bond funds, it would likely be earning investment returns. That’s not the case with money you’ve borrowed from the plan. And you can never recover that loss.

There are so many ways to fund a college education that it doesn’t make sense to consider your retirement plan as a primary source for educational expenses. Unless you have to, don’t put your financial future at risk!