Why is it important to consider loans last when paying for higher education?

Loans need to be paid back, but scholarships and grants are free money.

Why is it important to consider scholarships and grants before loans to pay for higher education?

Scholarships and grants are free money that do not need to be paid back.

What is the purpose of the FAFSA?

To access need-based federal aid, including federal loans

The FAFSA is unlike other financial aid applications because ____.

Each state has its own deadline and you need to apply every year.

When applying for the FAFSA, it is important to know ___ (3 things.)

Every state has its deadline. You need to apply the year before you attend higher education. You must fill it out every year you attend higher education.

Why must you include your family's income and tax information on a FAFSA application? (2 reasons)

The federal government awards aid and loans based on your family's financial needs. They are used to calculate your Student Aid Index (SAI), which determines your need-based aid.

If you are a dependent of a parent or caregiver, what will you need from them to complete the FAFSA?

Information about their income and taxes.

The FAFSA asks you to list the higher education institutions you will apply to because the federal government will _____.

send your student aid report directly to them

Should you wait to apply for the FAFSA until you know which higher education institution you will be attending?

No. It is important to apply early, even before you have been accepted to a program.

Merit scholarships can be awarded for many reasons. What are they? (5 reasons)

High GPAs, test scores, honors recognition, leadership roles, & community service

What are the resources you can use to find scholarship opportunities? (3 resources)

Community associations School counselors Institutes of higher education

How can the careers or hobbies of your family members help you earn scholarship awards?

Some employers and associations offer scholarships to participants and their family members.

___ financial aid program may require you to serve in the military after earning a degree.

Reserve Officer Training Corps (ROTC)

Why aren't financial aid programs like work-study and military programs considered free money?

These special programs have requirements to either work or serve in order to receive the money.

___ is an example of an income-driven repayment plan for student loans.

Payment amounts are based on a percentage of what you earn.

Example of an extended repayment plan for student loans.

Payments are low and can last up to 25 years.

What is an example of a graduated repayment plan for student loans?

Payments start lower and increase every 2 years.

High student loan payments can impact many life decisions. Name 3.

getting married and having children buying a car buying a house

How can high student loan debt impact a person's life decisions?

A person may choose to rent instead of buying a home since they can't afford a down payment.

How can a low credit score on your credit report affect you?

It can make it much harder to borrow money in the future.

A low credit score on your credit report can _____.

make it much harder to borrow money in the future

How could defaulting on a loan or having a high debt-to-income ratio impact your future opportunities?

It can lower your credit score and make it difficult to borrow money for big purchases like a house or car.

Consequence of defaulting on a loan: transcript withheld. How could this affect you as you graduate?

You may not get a job that requires a transcript.

One consequence of defaulting on a student loan is loan acceleration. What does this mean?

You owe the amount of your loan and interest immediately.

What does it mean to have your wages garnished?

Money is taken directly out of your paycheck to cover your debt.

Examples of things that can happen if you default on a student loan.

You may be taken to court and have to pay all fees. You may not be eligible for additional financial aid for future studies. Your tax refund may be withheld. You will not be allowed to request a deferment for the loan. You may have money taken directly from your paycheck to cover your debt. You may not be eligible for additional financial aid for future studies. You will not be allowed to request a deferment for the loan.

To qualify to refinance a student loan, you will need ___.

a good credit score and good income-to-debt ratio

Good reasons to refinance a student loan include ___.

You can get a lower interest rate. You want to combine/consolidate loans. You want to lower your payments by extending the loan term.

Paying for & Attending College Test Bank all questions Flashcards

Student preview

43 questions

Show all answers

1.

FLASHCARD QUESTION

Front

When paying for higher education, scholarships and grants can be considered _____.

Back

free money

2.

FLASHCARD QUESTION

Front

The biggest difference between scholarships and loans is that scholarships are considered _____ but loans must be paid back.

Back

free money

3.

FLASHCARD QUESTION

Front

_____ is considered "free money" when financing higher education?

Back

Scholarships and grants

4.

FLASHCARD QUESTION

Front

When paying for higher education, money that you borrow and must pay back later comes from _____.

Back

loans

5.

FLASHCARD QUESTION

Front

Loans are different from scholarships and grants since ____.

Back

loans must be paid back

6.

FLASHCARD QUESTION

Front

This method of funding higher education accrues interest until it is paid back?

Back

Loans

7.

FLASHCARD QUESTION

Front

What financial options should you consider first when paying for higher education?

Back

Scholarships and grants

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