Does it lower the taxable rate from withdrawing form a 401k to pay for college tuition?

[DoninGA]

The exception to the 10% early withdrawal penalty for qualified education expense is only if the the distribution was made from an IRA, not a 401(k).

If you are under the age of 59 1/2 a 10% early distribution penalty will be assessed on your federal tax return and entered on the Form 1040 as a tax liability.