unit 5 math of personal finance
Grants are generally _________________ while scholarships are generally _________________. a. need-based; merit-based b. merit-based; need-based c. free; require you to pay an application fee d. provided by the federal government; provided by the college you attend
A
Identify the order in which you should accept the following types of financial aid: I. Private Loans II. Scholarships & Grants III. Federal Student Loans IV. Work-Study a. II > IV > III > I b. III > II > IV > I c. II > III > IV > I d. III > I > II > IV
A
Indicate which statement regarding student loan grace periods is TRUE. a. The "grace period" for a federal student loan (Stafford) loan kicks in six months after graduation OR six months after a student drops below half-time status b. You cannot repay your federal student loan during the grace period, because it will interfere with the repayment schedule c. Once your grace period ends, there are no other options other than repaying your loan immediately d. The grace period starts six months after a student receives a federal student loan
A
Samantha graduates with $30,000 in debt and has a monthly student loan payment of $300. She earns a monthly salary of $6,000. Jacob graduates with $60,000 in debt and has a monthly student loan payment of $600. He earns $3,000 per month. Indicate which statement below is TRUE. a. As a percentage of salary, Samantha pays LESS for her monthly student loan payment then Jacob does. b. 10% of Samantha's monthly salary goes toward paying off her student loan. c. 10% of Jacob's monthly salary goes toward paying off his student loan. d. It is always better to have student debt that requires paying a HIGHER percentage of your salary to cover your monthly payment.
A
The FAFSA is used to determine your eligibility for all of the following types of financial aid EXCEPT a. Private Loans b. Scholarships & Grants c. Work-Study d. Federal Loans
A
A safe monthly student loan payment is typically less than ______ of your anticipated monthly starting salary. a. 10% b. 15% c. 20% d. 50%
A
After taking advantage of all possible free money and Federal Direct Loans, Starling still owes roughly $1100 per semester. Which of the following options would be the WORST financial choice for covering that gap? a. Starling could use his credit card which has a 19.9% variable interest rate. b. Starling could take out a private loan which has a 7.99% interest rate. c. Starling could get a part-time job to make up the difference. d. Starling could use money he's saved up from working summers during high school.
A
Which of the following statements is FALSE about financial aid? a. Financial aid is money that is given to you - you never need to pay it back. b. Financial aid may be awarded to you based on factors such as your financial need, academic performance, or athletic ability. c. Financial aid may include money that you have to pay back later. d. Most full-time students receive some form of financial aid.
A
How can projecting the costs for college for your entire college career help you select a school? I. You can estimate what student loan repayment will look like after graduation. II. You can compare the total costs over the four years for each school to help you make a more financially smart decision. III. You can rest assured that the costs you have projected are the exact costs you will have by the time you graduate. IV. You can assume that your starting salary after graduation will be equal to the total cost of attendance. a. I only b. I & II only c. I, II & III only d. I, II, III, & IV
B
After completing the FAFSA, your SAR (Student Aid Report) indicates that your Expected Family Contribution is $5,700. If your college's cost of attendance (COA) is $45,000, what is your financial need? a. $0 b. $5,700 c. $39,300 d. $45,000
C
You take out a $3,000 UNSUBSIDIZED loan as a freshman with an interest rate of 4% per year. When you graduate four years later, approximately how much will you owe on the loan? a. $3,000 b. $3,120 c. $3,500 d. $12,000
C
To file the FAFSA, you will need all of the following EXCEPT a. Your Social Security Number b. Federal Tax forms, including W-2s from two years prior c. Bank statements, including savings and checking account balances d. Your high school student ID number
D
You've received your financial aid package, but unfortunately, it's not enough to cover the cost of attendance. What can you do? I. Continue applying for scholarships II. Get a part-time job (but make sure not to exceed 12-15 hours/week so you can stay focused on school) III. Consider taking out a private loan (but be sure that your total student loan debt is manageable (less than your expected starting salary after graduation, as taking out private loans should only be a last resort) IV. Use the Special Circumstances Reevaluation option if your family has experienced significant changes that impact your financial situation a. only I b. I & II only c. I, II, & III only d. I, II, III, & IV
D
When accepting loans in a financial aid award letter, it is a good idea to... a. Accept all loan money offered to you even if you don't think you will need all of it. b. Accept all loans and then contact the school's financial aid office about any questions you may have. c. Understand any loan terms, conditions, and interest rates before accepting the aid. d. Accept all federal loans as quickly as possible as they are first-come, first-served.
idk
You overhear your friends talking about the FAFSA. Which of the following statements is TRUE? a. Sarah says, "I come from a relatively high-income family. I am still going to file the FAFSA though because there is no income cut-off to qualify for federal student aid." b. Ben says, "I support myself so when I file the FAFSA, I definitely won't have to include my parents' information on the form." c. Sadhana says, "My brother isn't the best student, so I told him not to file the FAFSA because most federal student aid programs take grades into consideration in the same way that academic scholarships do." d. Niko says, "I really don't like that filing the FAFSA only determines my eligibility for funding from the federal government. I have to then file a separate application for funding from the state and possibly schools that I'm applying to!"
A
Your cousin is getting ready to apply for college and is looking into financial aid. Which of the following statements about scholarships and grants she tells you is TRUE? a. "The more money in scholarships and grants that you receive, the less money that you will likely have to borrow to pay for college." b. "You should choose the college that provides you with the most scholarship dollars." c. "It is generally not a good idea to apply for more than 2-3 scholarships." d. "Unless you have a really strong GPA and high test scores, it is probably not worth applying for scholarships since they are so competitive."
A
Another difference(s) between scholarships and grants is that SCHOLARSHIPS... I) may be withdrawn if you do not meet certain requirements, such as maintaining a minimum GPA, etc. II) always have an application fee in order to apply. III) are a type of "free money" while grants are not. IV) may or may not be renewable each year. a. I & II only b. I & IV only c. II &IV only d. II &III only
B
Arrange these steps in the financial aid process in the proper order from first step to last step. I) Review Student Aid Report II) Get tax information from two years prior III) File FAFSA IV) Receive Financial Aid Award letter from colleges where you have been accepted a. III > I > II > IV b. II > III > I > IV c. II > I > III > IV d. I > III > II > IV
B
Four friends each give you a piece of advice about finding scholarships. The advice of each friend is below. Which one is BAD advice? a. You have to be persistent when searching, because there are thousands of scholarships online. The search may be long, but it's worth it! b. You should spend at least 3 months researching every single type of scholarship out there prior to applying. c. To increase your chances of being awarded a scholarship, you should connect with individuals and organizations in the community who offer scholarships. d. It will help if you think "outside the box" to find unique scholarship opportunities that the average student won't qualify for.
B
In order to qualify for Federal student loans... a. You must have financial need b. You must file the FAFSA c. You must complete a separate application for federal loans d. You must take out a private loan
B
Jessica received the following financial aid award letter for her freshman year. How much does Jessica still need to come up with to pay for her first year of college? Total: $34,100.00 a. $2,000 b. $20,900 c. $34,100 d. $55,000
B
Liz is creating a budget. She should include all of the following EXCEPT a. The $150 work-study paycheck she just received in her mailbox b. The $60 club membership fee that was waived c. The $8.50 burrito she bought for dinner last night d. The $50 direct deposit her grandma sent to her for her birthday
B
To decrease your total student debt, it is a good idea to do which of the following? a. Take out student loans that amount to more than you expect to earn in the first year after you graduate b. Pay the interest on your loans while you are still in school c. Borrow private loans first d. Take an extra year to graduate (5 years total)
B
True or False: It is likely that a student will be able to use only grants to finance their entire college education. a. True b. False
B
What is the connection between your Student Aid Report (SAR) and your Financial Aid Package? a. You receive your SAR after you get your Financial Aid Package. b. Schools use the information on your SAR to create a Financial Aid Package for you. c. Schools use the information in your Financial Aid Package to create your SAR. d. There is no connection between the SAR and the Financial Aid Package.
B
When talking to a parent/guardian about paying for college, it is helpful to do all of the following EXCEPT a. Pick a time that is convenient for you and your parent/guardian to have the conversation b. Assume that your parent/guardian has a detailed plan set up for you c. Take notes during the conversation d. Have a few questions prepared to ask and discuss
B
Which federal loans are available for parents to take out for their children's education? a. Perkins Loans b. Direct PLUS Loans c. Subsidized Direct Loans d. Unsubsidized Direct Loans
B
Which of the following is TRUE about your Student Aid Report (SAR)? a. You receive your SAR and Expected Family Contribution (EFC) separately. b. You should carefully review your SAR for any errors, because schools use the information on it to create your financial aid package. c. You should wait until you accept an offer of admission from a college before reporting any errors you find on your SAR. d. You usually receive your SAR about 6 weeks after submitting the FAFSA.
B
Which of the following is TRUE when selecting a college to attend? a. You should never accept offers of admission from schools with a high sticker price. b. There can be a big difference between a school's sticker price and net price. c. Schools with the lowest sticker price are always the most affordable option. d. You should accept the school that gives you the most money in scholarships and grants.
B
Which of the following should rank as one of the MOST important factors students take into consideration when selecting a college? a. The quality of the food in the dining hall b. The academic reputation of the college c. The number of sororities and fraternities at the college d. The size of the dorms on campus
B
Which of the following statements is true about the value of a college education? a. Steve says, "The only value of a getting a college education is that your lifetime earnings will likely be more than a person who does not go to college." b. Christina says, "The value of a college education is that you will likely earn more over your lifetime, you grow a lot personally, and you get to make new connections." c. Judah says, "College is only valuable if you choose to study specific majors." d. Carla says, "College is not that valuable, but one cool thing is that you have the chance to study abroad."
B
Which statement is TRUE? a. You can only submit FAFSA once. Most students do it in the last year of high school. b. You can only submit FAFSA once. Most students do it before the first year they will attend college. c. You have the option of submitting FAFSA more than once. This is important for students facing unforeseen financial difficulties. d. You must submit the FAFSA annually as you/your family's financial situation may change and therefore impact your aid.
B
You are listening to a friend talk about schools she got into. Which of the following statements she makes is a MISCONCEPTION? a. "I'm no longer considering schools with a high loan default rate - I want to make sure I can make my student loan payments after I graduate." b. "I want to go to a school that has a high acceptance rate - it means that the students there will be better." c. "I ended up eliminating a school from my list because it reported a low graduation rate - I want to set myself up for success!" d. "I like that one of the schools I'm looking at has a low student:faculty ratio - it probably means the faculty will be able to provide me with more direct guidance."
B
A rule of thumb is a broadly accurate guide or principle. Which statement below represents a rule of thumb for how much a student should borrow for their college education? a. A student should borrow as much as a private lender will allow them to borrow. b. A student should borrow no more than 35% of their discretionary income upon graduation from college. c. A student should borrow no more than they expect to make as a starting salary upon graduation from college. d. A student should borrow as much as they expect to earn 10 years after they graduate from college.
C
Brian is about to give a short presentation on repaying federal student loans and he's come to you to fact check his information. Which of the following statements is the only one that is TRUE? a. There are only two different repayment options for federal student loans. b. Once a repayment option is selected, it cannot be changed. c. The various loan repayment options differ in the monthly payment required and the length of time it will take to repay the loan. d. Repayment of the loan is required immediately after the loan amount is disbursed (or received) by the borrower.
C
Ellen has all of her major expenses covered for college and is trying to budget her monthly expenses such as dining out, fun with friends, personal items, etc. Which one likely makes the most sense? a. Ellen doesn't need any extra money as long as her tuition, room & board, and fees are paid. b. Ellen could realistically budget $40 per month, meaning she'll need about $200 for the semester. c. Ellen could budget $100 per month, plus an extra $500 for transportation to/from home twice, meaning she'll need about $1000 for the semester. d. Ellen can budget $1000 per month, meaning she'll need about $4500 for the semester, even though she'll need to put it all on a credit card.
C
If you consolidate your loans through the Federal Direct Loan Consolidation Program, this means that you can... a. Consolidate (combine) all federal student loans and other loans you may take out in the future (such as a mortgage) into one loan to make loan payment and monitoring easier. b. Consolidate (combine) all student loans and credit card loans into one loan to make loan payment and monitoring easier. c. Consolidate (combine) multiple federal education loans into one loan to make loan payment and monitoring easier. d. Consolidate (combine) all student loans so that you can reduce your loan balances by 50%.
C
Kevin is struggling to make payments on his federal subsidized and unsubsidized loans. His loan servicer reached out to him earlier this week and asked if he wanted to postpone payments for the next six months. Kevin is discussing it with you and says, "This is so great! If I accept this, I don't have to make any payments for six whole months!" Which of the following do you tell Kevin? a. "It's important to know whether you would be using deferment or forbearance, because under DEFERMENT, interest continues to accrue on your subsidized loans." b. "That is awesome! Definitely accept the offer soon, because this is a one-time, unique opportunity, and you don't want to miss it!" c. "It's important to know whether you would be using deferment or forbearance, because under FORBEARANCE, interest continues to accrue on your subsidized loans." d. "Don't take the offer, Kevin; it's a scam!"
C
Leslie has been accepted into the college of her choice but is worried about the total cost of attending. Which of the following can she do to reduce her college costs over the course of her college career? I. Taking fewer courses per term to pay less in tuition II. Become a Resident Assistant in the dorms to get free room and board III. Live with a roommate(s) in the dorms IV. Taking more courses per term (if she can handle it) so she can graduate early a. I only b. II & III only c. II, III & IV only d. I, II, III, & IV
C
Mckinsey has been accepted into a few colleges, but is feeling the pressure of making a financially smart decision. You decide to ask her a few questions to see if she has thought things through. Which of the following questions would NOT be helpful to ask Mckinsey at this stage? a. "Have you calculated the net price of each college you're considering?" b. "Have you estimated what your monthly student loan payments look like after graduation?" c. "Have you identified whether taking the bus is faster than taking your bike to get to your classes?" d. "Have you spoken to a financial aid representative from each school to discuss any questions and/or concerns you have?"
C
Roughly how much will Jessica owe at the end of her freshman year in student loans assuming an average interest rate of 4.5%? (Keep in mind that Perkins Loans do NOT accrue interest until repayment begins.) a. $4,000 b. $8,000 c. $8,100 d. $8,400
C
Sam has $30,000 in federal student debt and has a monthly payment of $300/month. Jordana also has $30,000 in federal student debt and has a monthly payment of $200/month. Which of the following statements is TRUE? a. Jordana has a LOWER interest rate on her loan because she has a HIGHER credit score. b. Jordana has a SHORTER repayment term and will pay LESS in interest. c. Sam has a SHORTER repayment term and will pay LESS in interest. d. Sam has a SHORTER repayment term and will pay MORE in interest.
C
Samuel takes out a federal student loan for $5,000 to help pay for his freshmen year in college. Which statement below is TRUE about this loan? a. He is required to start repaying the loan while he is in school. b. Since he took out a loan his freshman year, he will not be allowed to borrow a federal student loan to pay for his sophomore year. c. He would be charged (begin accruing) interest on this loan immediately if it was an unsubsidized federal student loan. He can make interest payments while he is still in school to minimize his total student loan debt. d. His interest rate is variable (may change) for the term of his loan
C
What can you expect to do if you decide to take out student loans? I) Sign a promissory note II) Stay in touch with your loan servicer when repayment begins III) Research your potential starting salary after graduation to make sure you can make your monthly loan payment IV) Take out all loans that are offered to you in your financial award letter a. I & II only b. II & III only c. I, II, & III only d. II, III, & IV only
C
When selecting a major to study in college, why should you consider your "employability" and earning potential after graduation? I. With the cost of college rising every year, you want to make sure that your investment "pays off" after graduation. II. Knowing your earning potential can help you determine if you will be able to make your monthly student loan payments. III. Most employers guarantee a salary within your earning potential after graduation. IV. Knowing your "employability" and earning potential can help you plan a life after college, such as where you can live, what your budget will look like, etc. a. I only b. I & II only c. I, II & IV only d. I, II, III, & IV
C
Which of the following is the MOST popular way families fund a college education? a. Parent Borrowing b. Student Borrowing c. Scholarships & Grants d. Student Income & Savings
C
Which of the following situations is MOST likely to be accurate? (Assume that a student is attending college with a cost of attendance of $35,000) a. Family has EFC of $36,000 and student receives Pell Grant of $5,920. b. Family has EFC of $0 and student does not qualify for Pell Grant. c. Family has EFC of $0 and student receives Pell Grant of $5,920. d. Family has EFC of of $35,000 and student receives Pell Grant of $3,000.
C
Which of the following statements about budgeting for freshman year of college is FALSE? a. Many students' expenses change after freshman year as they consider living off campus and/or having a car. b. Many students have more cash available freshman year due to high school graduation gifts and previous saving than they will in the future. c. Colleges guarantee that you will receive the same amount of aid that you received your freshman year for all four years. d. You're eligible for less money in Federal Direct Loans during freshman year than you are other years.
C
Which of the following statements is TRUE? a. Dropping out of college will probably save you money in the long term, because you no longer have to pay for items such as tuition, textbooks, etc. b. Dropping out of college will probably save you money in the long term, because dropouts do not have to repay their student loans. c. Finishing college is usually a good long run investment, because graduates typically make more money for many years after graduating. d. Finishing college is usually a good long run investment, because you will be refunded your tuition money only if you actually graduate.
C
Which of the following students could benefit the MOST from revisiting his/her budget and reevaluating how he/she spends? a. Eliza, who lives at home with her parents and attends the 4-year public university that is 20 minutes away. She spends the majority of her money on gas, buying used textbooks, and sometimes eating at the on-campus cafeteria. b. Danny, who is a member of an on-campus fraternity that charges $900 in dues every year. To save money in other areas, Danny has a part-time job, rents textbooks, and eats only in the dining hall with his basic meal plan. c. Aisha, who sometimes takes an Uber or Lyft when she doesn't want to take the bus. She spends about $45/week getting meals off campus with friends while paying for the most expensive meal plan the college offers. d. Gareth, who attends a private university on a basketball scholarship. He occasionally eats out, and the expenses he incurs from the traveling he does with his team are covered by the college.
C
Which of the following tactics is MOST helpful when applying for scholarships? a. Applying to scholarships within general, broad categories that hundreds of other students also apply to. b. Using an identical essay for ALL of your scholarship applications. c. Identifying unique categories of scholarships that are tailored to your talents, skills, and situation. d. Following the rule of thumb that recommends you apply to fewer than 10 scholarships.
C
Which statement is TRUE? a. You can apply for FAFSA before it officially opens and there are special awards for those who do b. You can only apply for community or private scholarships after submitting FAFSA c. You can apply for community and private scholarships even before submitting FAFSA d. Even if you apply late for FAFSA you're still guaranteed an award.
C
Why is it important to know what your Expected Family Contribution (EFC) is? a. The EFC is the limit that schools you are applying to can award to you in scholarships. b. You have to know what your EFC is in order to submit the FAFSA. c. Schools use your EFC to calculate the maximum amount of need-based aid you are eligible for. d. Your EFC determines how much you can take out in private loans.
C
You are talking to your friend who is worried that he won't be able to distinguish if a scholarship or grant opportunity is a scam or not. Which of the following is/are a sign(s) of a scam? I) The application guarantees that you will get a certain amount of money by applying II) The application uses terms like "sweepstakes", "drawing", "random selection", etc III) The application requires you to write an essay or a few short-answer questions IV) The application asks for your social security number a. IV only b. I, II, & III only c. I, II, & IV only d. All four are signs of a scam
C
You have $1,500 to spend over a five month semester to cover your living expenses. In the first month, you spend $150 at restaurants, $50 on personal care items, $40 on a pair of jeans, $60 on your cell phone bill, and you fly home for $200 to visit your friends. How much can you spend on average in each of the next four months to stay within your spending plan? a. $0 b. $200 c. $250 d. $300
C
Your friend provides you with different methods to find out what the NET PRICE of a school is, but cautioned that one of the methods may not work. Which of these methods would NOT work to calculate the net price of a school? a. Use the formula: Published Price - (Scholarships + Grants) b. Use the College Board's Net Price Calculator c. Use the formula: Published Price - (Scholarships + Grants + Loans) d. Use the net price calculator on that school's website
C
A subsidized loan is when ____________________ pays the interest while you are in school, while an unsubsidized loan is when___________________ pays the interest while you are in school. a. the government; parents b. the borrower; parents c. the borrower; the government d. the government; the borrower
D
As a freshman living on campus, you can expect to have the following costs EXCEPT a. Room and Board b. Tuition c. Fees d. Rent
D
As a freshman, Pedro's tuition for the school year is $8000, and his room and board plus fees is another $7500. He received $5000 in merit scholarships and $1500 in need-based aid from his college and a $2000 Pell Grant. Which of the following is TRUE about Pedro's budget? a. Because the college has already given him all the aid it can, Pedro can no longer call his college's financial aid office and ask them to review his aid and help him find additional funding. b. Pedro has used all of his possible funding options, so this college is too expensive for him to attend. c. Pedro's parents cannot apply for a Direct PLUS Loan from the federal government, because Pedro has already received a Pell Grant. d. Pedro needs more than just $7000, because he'll have additional expenses during freshman year.
D
Brian is in the process of calculating the net price for a college he has been accepted into and is using the following formula: Net Price = Sticker Price - (Scholarships + Grants + Loans). He knows that you've been learning about paying for college and asks you, "Is this formula correct ?" What do you say and why? a. Yes, the formula is correct, because you are subtracting the financial aid you are receiving from the college's sticker price. b. No, the formula is not correct, because you have to switch Net Price and Sticker Price. c. No, the formula is not correct. You do not include scholarships and grants in the formula, because the college's sticker price includes these types of aid. d. No, the formula is not correct. You do not include loans in the formula, because this is money you have to pay back later (with interest).
D
How can determining what your needs and wants are help you when creating a budget in college? I. If you need to decrease your spending, you already know what your "wants" are, so you can start cutting back on those items immediately. II. Figuring out your needs and wants can help you rein in your spending overall. III. You can rest assured that your needs and wants will stay constant throughout your four years in college, so you don't need to alter your budget once it's set. IV. Knowing what your needs and wants are can help you make financially smart decisions, particular in social settings when you may feel pressured to participate in events that cost more money than you can afford. a. I & II only b. II & IV only c. II, III, & IV only d. I, II, & IV only
D
Identify which of the following statements about the FAFSA is TRUE. a. You can submit the FAFSA starting in January. b. There is an $80 fee to apply for the FAFSA. c. The amount of aid you may receive does not depend on when you file, as long as it is within the filing timeframe. d. If you miss your school's deadline to complete the FAFSA, you should still complete it and submit it.
D
If Ahmad is applying for a scholarship that is looking for students with "outstanding leadership qualities and academic excellence", which of the following should he highlight and expand upon in his application essay? I) Member of the robotics team for the past 6 months II) Section leader of the trumpet section in the school's marching band since his sophomore year III) GPA of 3.5 IV) Volunteer experience from last weekend's festival where he helped set up tables a. I & II only b. I & III only c. III & IV only d. II & III only
D
It is a good idea to talk to a parent/guardian about paying for college, because... I. You can give all financial responsibility for paying for college to your parents. II. Your parents can help you fill out paperwork and understand financial terms you may not have encountered before. III. You can create a list of colleges that you and your family can realistically afford (after grants, scholarships, etc). IV. You have a solid understanding of the financial commitment and investment you are making before attending college. a. I only b. II & III only c. I, II & IV only d. I, II, III, & IV
D
It is important to carefully review your Financial Aid Award letter, because I. You want to make sure you fully understand the different types of financial aid you are being offered. II. If you don't read it, colleges can withdraw their offer of admission. III. You can identify any questions you may have and contact the school's financial aid office. IV. You can calculate the Net Price of attending that school. a. I only b. I & II only c. I, II, & III only d. I, III, & IV only
D
Julia is having a hard time understanding how her monthly student loan payments will work after graduation. She knows you just learned about student loan repayment and tells you all she knows. Which of the following statements Julia makes is TRUE? a. Your monthly student loan payment goes toward the principal balance, accrued interest, and a mandatory monthly fee charged by the lender. b. Assuming that you are not falling behind on your loan payments, the amount of interest that you pay each month will INCREASE over time. c. When you make a payment, the lender puts money toward the principal first. Then, the remaining balance is put towards any accrued interest. d. If you don't make any interest payments, it can "capitalize", or be added to the principal balance, which increases how much you owe overall.
D
Order the steps you would take in order to have the best chance to receive scholarships. I) Identify scholarship organizations that match up well with your skills and interests II) Develop a list of your special skills and interests III) Apply for scholarships IV) While in high school, get involved in extracurricular activities that interest you a. I > II > IV > III b. IV > I > II > III c. II > I > IV > III d. IV > II > I > III
D
School 1 has a sticker price of $50,000 and offers $40,000 in grants and scholarships. School 2 has a sticker price of $15,000 and offers $3,000 in grants and scholarships. School 3 has a sticker price of $80,000 and offers $60,000 in grants and scholarships. School 4 has a sticker price of $10,000 and offers $1,000 in grants and scholarships. Which school has the lowest Net Price? a. School 1 b. School 2 c. School 3 d. School 4
D
Some financial aid award letters may include a PLUS loan as a part of the financial aid package. Why should you be cautious with these loans? a. PLUS Loans are PRIVATE loans that require you to work with a 3rd party lender and make extremely high interest payments. b. PLUS loans are PRIVATE loans that STUDENTS must take out and they come with a high interest rate. Students may accept the loan without thinking of the financial consequences. c. PLUS loans are unique in that they have a separate application you need to submit. Many students are not aware of this step and end up not receiving the loan. d. PLUS loans are FEDERAL loans that are given to PARENTS and require a minimal credit check. PLUS loans are often included to complete a financial aid award offer but can lead to dangerous levels of debt.
D
When creating a budget for college, which do you think represents good advice? I. Budgeting one year at a time since the future is so uncertain II. Creating a four and five-year budget which assumes that tuition and room and board and other costs increase by 4-5% per year since these costs tend to increase each year III. Creating a four-year budget which keeps tuition and room and board costs constant since they don't change much each year IV. Be sure to check with your college to see if the financial aid awards they provide (grants and scholarships) are typically renewable every year, assuming satisfactory academic progress a. I only b. II only c. I & III only d. II & IV only
D
When selecting a college, it is important to consider... I. The school's location II. Student:Faculty ratio III. % of students who graduate IV. Loan Default Rate a. I only b. I & II only c. I, II & III only d. I, II, III, & IV
D
Which of the following is a potential consequence you may face if you don't pay back your student loans? a. If you wait five years, your student loan is likely to be forgiven. b. If you don't remember taking out student loans, you can appeal to have the student loans forgiven. c. You may still be eligible for federal education loans, but you are no longer eligible for private education loans. d. Your credit score is negatively impacted.
D
Which of the following might be potential sources of scholarships? a. The company that one of your parents works for b. A local service organization (e.g. the Kiwanis or Chamber of Commerce) c. The college you plan on attending d. All of the above
D
Which of the following statements is TRUE about the advantages of federal student loans compared to private student loans? a. Federal student loans generally offer higher interest rates which remain fixed over the term of the loan b. Federal student loans do not need to be repaid if the borrower runs into financial difficulty and goes bankrupt c. Federal student loans require a credit check d. Federal student loans offer more flexible repayment terms
D
Which of the following statements is TRUE? a. If you declare bankruptcy, your federal student loans will be forgiven. b. If you finish school, your federal student loans will be forgiven as long as you have good grades. c. There is no way to have any portion of federal student loans forgiven. d. Part of your federal student loans can be forgiven under certain circumstances, including a public service career or making on-time payments for many years on certain payment plans.
D
Which of the following statements is TRUE? a. When applying for FAFSA you can assume that all grants, scholarships, federal loans, and personal savings will cover the entire cost of attending that college. b. After receiving your financial aid report from each school you can assume that all grants, scholarships, federal loans, and personal savings will cover the entire cost of attending that college. c. When applying for FAFSA you will find out which portion of the total cost of college you will have to cover. d. After your financial aid report from each school you will find out which portion of the total cost of college you will have to cover.
D
You enter college with an interest in becoming a teacher. You do some web research and see that the starting salary for high school teachers ranges from $35,000 to $50,000. Based on rules of thumb we analyzed in the lesson, what is a conservative (safer) amount of student debt to take on? a. More than $50,000 b. Double your starting salary or $70,000 to $100,000 c. About $50,000 d. $35,000
D
Your friend is talking about stuff she has read online about PRIVATE student loans. Which of the following statements she says is TRUE? a. "You do not need a co-signer for taking out private student loans; you only need a co-signer for taking out federal loans." b. "Private student loans are subsidized." c. "All private student loan lenders offer forbearance and deferment options." d. "Private student loan lenders may require you to make payments toward the loan while you are still in school."
D
How much of Jessica's financial aid award does NOT need to be repaid? a. $22,200 b. $23,100 c. $26,100 d. $34,100
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