I do not qualify for educational expenses because IRS stated I made too much money. But I made too much money because I cashed out my 401K to pay for college expenses.

That’s the reality of tax law. 

More bad news: Taking money out of a 401k, before age 59.5, is subject to a 10% penalty.   401(k) withdrawals for educational expenses do not qualify for an early withdrawal penalty waiver, but IRA withdrawals do.

Consider taking a loan form your 401k, instead.

Rolling over the 401k to an IRA (not Roth) first would avoid the penalty, but you'd still have the too much income problem.