EDUC Mod 2, CH. 10

Maria's older cousin asks her about her financial goals. Which response shows that Maria may need some help in preparing a budget?

"I want to have more money."

PLUS loans can be paid back over a period of ________ years.

10 to 25

When you have a budget, you generally want to keep track of your spending. How can using a credit card add some convenience to that process?

A credit card provides a record of purchases.

Identify the first, second, third and fourth step in dealing with financial difficulties.

Assess the problem Contact creditors See credit counselor Stick to plan

What is the first step in applying for financial aid?

Contact and discuss your needs with your campus financial aid counselor.

Identify the fundamental step for managing money.

Develop a budget.

Initial questions to ask when developing an understanding of the role that money plays in your life include which of these?

Do I know where my money goes? Do I have the cash I need to buy the things I want? Do I spend more than I think I should?

All budgets are based on an uncomplicated premise, that ________ should not exceed income.

Expenditures

Provide the abbreviations rather than the full names: The ____________ and _________Profile are standard forms used to assess a student's financial capabilities and determine how much the student and family can be expected to contribute toward college expenses.

FAFSA, CSS

True or false: There is one application form used for requesting financial aid at all public colleges and universities nationwide.

False

Upon receiving your financial aid package, you discover that it is not sufficient enough to cover your college costs. What should you do first?

Get the financial aid office to take a second look at your application.

· Identify the two reasons not to apply for more financial aid than you need.

It is unwise to load yourself up with unnecessary debt. When you take more, others may not be able to get what they need.

Which of the following go into building an estimate of how much you'll need to spend over the next year?

Keep track of everything you spend for a week. Look at your past expenditures to get an idea of your costs.

The ______________ ______________ Credit is a scholarship in the form of a tax credit targeted to older students who are going back to school.

Lifetime Learning

Nailah has a high-interest credit card that she intends to use only for emergencies. When her car breaks down, she uses the card for the repairs. When the bill comes in, she has only just enough left in her monthly budget to pay the bill. She decides to pay just the minimum instead of the balance, so that she'll still have spending money. Which of the following is true?

Nailah will end up paying significantly more for her car repairs than if she had paid off the card's balance.

Parents who claim the student as an income tax deduction are eligible for _____________ loans to assist with college costs.

PLUS

___________ grants are provided to undergraduate students who have earned no previous degrees and are based on need.

Pell

__________________ are awarded by the college, a company, or other organization to be applied to the cost of tuition, and they do not have to be paid back.

Scholarships

· Caterina and Marika moved into their apartment and realized that they had two small lamps for a space that only needed one and they were missing a small scatter rug for the kitchen. In order to reduce expenses, which of the following strategies might they employ?

Share and trade.

_____________ loans are available to students who are U.S. citizens or permanent residents and are registered for classes at least on a half-time basis.

Stafford

Identify the outcome that is NOT likely if you try to hide from those to whom you owe money.

They will forget about it.

Which of the following is NOT recommended for saving money?

Use credit cards.

Which questions should you ask when deciding whether to get and use a credit card?

What is the interest rate? Do I need a credit card? Is there an annual fee?

Identify an example of when it may be advantageous to accept a credit card with an annual fee.

When the card has an exceptionally low interest rate.

Identify the events that will make it necessary to review and possibly revise a budget.

You received more financial aid than anticipated. Your hours at work were cut.

Identify events that qualify as emergencies in most cases and would be appropriate for using a credit card.

Your car breaks down and you cannot get to work. You need a plane ticket to get to your grandmother's funeral.

· Identify the possible drawbacks to using a credit card.

Your credit rating can be damaged. It's too easy to spend money. Interest rates can be high.

Sometimes ________ is a better investment in your education than a job, especially if the job takes away from your studies and adds to your level of stress.

a loan

When writing a personal letter to attach to your financial aid application, include

a request for special consideration. a description of the circumstances.

A bad credit record with a credit card company lasts for close to a decade and affects your

ability to purchase a car or home.

With the easy money of a credit card, spending can become

addictive

Income amounts used to build your budget should be

after-tax income amounts.

· Some credit cards have a(n) ______________ ______ ranging from $20 to $100 a year.

annual fees

When listing your income sources as part of building a budget, you should include all of the following EXCEPT

anticipated inheritance.

Large expenses such as tuition paid once or twice a year

can create difficulties in managing one's finances.

The practice of putting aside some amount of your income is

central to good financial management.

Pell grants are awarded by

college financial aid offices.

It doesn't matter if you have an income; the mere fact that you are a ________ is sufficient for you to be approved to receive a credit card.

college student

The key to meeting expenses with an irregular income is to

create a budget.

A person's _____________ _____________ is a record of past borrowing and payment behavior.

credit report

Students can receive student loans from

credit unions. banks.

Financial aid applications require you to

deal with paperwork.

College loan payments are often ________ until after graduation.

deferred

Shannelle has an 8-month part-time job on campus and a 2-month full-time job in the summer, which means her income is

distributed erratically.

A person or website service that requests payment to identity obscure scholarships that will yield thousands of dollars is very likely

doing something you can do yourself.

Identify the credit card actions that can result in negative consequences for your credit rating.

exceeding your credit limit late payments

Perkins loans are made on the basis of

exceptional financial need.

To ensure that you have the best chance to be considered for campus-based funds, you should

fill out your college's application form and return it as early as possible before the deadline.

The most up-to-date financial aid information is available from your campus

financial aid office.

A scholarship may be awarded based on

financial need. merit.

A _____________ interest rate does not vary from month to month.

fixed

Remember that when you ________ you must begin to repay student loans.

graduate

A work-study position is part of a student's total financial aid package, and even though work is required, it is generally considered a

grant.

Some people find budgeting to be a relatively easy process because they

have developed a personal financial philosophy.

Unlike Pell grants, which are based on need and guaranteed to every eligible student, FSEOGs are

in limited supply.

What is one way that banks and other lending agencies make money?

interest charges

You know that a credit card expenditure can be justified as an emergency expense when

it is a life saver.

To know where your money is going, you must

keep track of all expenses.

In what ways can using a credit card affect your credit history?

lead to a good credit history lead to a bad credit history help establish a credit history

One financial philosophy takes an approach opposite to an obsession with money, finding happiness by prioritizing other values and

living frugally

Funding for college comes in three basic categories: ___________,___________ ,_________________ and .

loans, grants, scholarships

Perkins loans typically have a ________ interest rate.

low

What is the major product that banks sell?

money (loans)

It is recommended that you review your budget each

month

Qualifying for grants is

more difficult than qualifying for loans.

It would be shortsighted to decide not to bother with an education because of the cost. You may, however,

need to choose a school according to its tuition and the financial aid package it offers.

Work-study grants provide jobs for undergraduates with financial

needs.

FSEOGs are supplied by the government to the colleges and are for

needy students

Which of the following represent conveniences of using a credit card?

online purchases. consumer protection in cases of defective merchandise.

Identity thieves may use your credit card number to

open new credit card accounts in your name. make purchases. rent a house in your name.

The key to finding sources of funding for your education is

persistence.

Budgeting is very ________, in that one person's budget will not work for someone else.

personal

The stated amount of a loan is called the______________.

principal

One of the more useful outcomes of developing a budget is

security.

In addition to a great deal of information about past, present, and expected income from all sources, the FAFSA and CSS Profile require

several tax returns from prior years.

Developing an effective budget depends on your determination of

short- and long-term financial goals.

Identity theft can occur when someone gains access to your credit card information or your ____________________ _________________ number.

social security

When you have planned for an expenditure, you are permitted to

spend without guilt.

A personal letter attached to your financial aid application should include factors that affect your ability to pay for college

that are not adequately reflected in the application.

Federal government scholarships that are awarded in the form of tax credits include

the American Opportunity Tax Credit (AOTC). the Lifetime Learning Credit (LLC).

Interest rates can have a significant impact on credit card balances if

the entire balance is not paid each month.

Even though college is expensive, the cost is outweighed by all of the following EXCEPT

the opportunity to embarrass non-college graduates when applying for jobs.

· High levels of debt among college graduates has resulted from which of the following?

the relative simplicity of getting college loans. earning less than they thought they would after graduation

To determine your personal financial philosophy, what must you first identify?

the role that money plays in your life

One disadvantage to using credit cards is that

they are too convenient.

Finding the money to pay for college takes which other scarce commodities?

time and energy

The most direct way to increase income is with a part-time job, but part-time jobs come with

time management challenges.

An important first step of wise money management is

understanding the role money plays in your life.

A loan that is ________ accumulates interest while a student is in college.

unsubsidized

A(n) ___________ interest rate can move up or down each month.

variable

Stafford loans provide from $5,500 to $12,500 for each ________ a student is enrolled in college.

year

If you accept one element of a financial aid package

you may not have to accept all elements.

Payments on college loans being deferred until you graduate assumes that

you will begin to earn an income after graduating.

The first stop you should make in searching for available financial aid is

your college's financial aid office.

You have created a budget that "adds up" when

your total expenses are covered by your total income.

· Students in particular find managing their money difficult because

Ø their income is sometimes erratic. Ø large payments are due several times during the year.