Unit 4 Review: Paying for College

Which of the following statements is TRUE about the value of education?

• A high school graduate can expect to earn about the same as a college graduate.

• Every college graduate can expect to have a starting salary over $60,000 right after college.

• A college graduate can expect to earn, on average, about a $1,000,000 more than a high school graduate over a career.

• Pursuing a college degree only has quantitative benefits, such as a higher salary.

While doing online research about the colleges you're considering, you see an ad that says, "Enter a few vital pieces of information, pay $39.99 per month, and we guarantee you’ll win a scholarship. You don't even have to write an essay! Sign up today with just your name, social security number, and an email address!" How should you proceed?

• Sign up, but use a fake email address in case it's spam.

• Sign up, because at $40 per month, it will be a bargain if you win thousands in scholarships.

• Don't sign up unless your parent says it's OK to use their credit card for the payments.

• Don't sign up, because you shouldn't pay money to win scholarships, and you shouldn't enter your SSN into unknown websites.

Which of these options depicts the types of financial aid from MOST attractive to LEAST attractive?

• Private loans, Federal loans, Work-study, Grants/Scholarships

• Grants/Scholarships, Work-study, Federal loans, Private loans

• Work-study, Grants/Scholarships, Federal loans, Private loans

• Federal loans, Grants/Scholarships, Work-study, Private loans

In order to qualify for financial aid, which form must you file?

• FAFSA

• Financial Aid Letter

• EFC

• SAR

Which of the formulas below equates to net price?

• Sticker price minus student loans = net price

• Grants and scholarships + student loans = net price

• Sticker price minus grants and scholarships = net price

• Sticker price + grants and scholarships = net price

Abby's family earns about $60,000 per year. She has been accepted to State University and Valley College and is comparing their financial aid packages. State University has a sticker price of $28,000 and net price of $12,000. Valley College has sticker price of $60,000 and net price of $9,000. Which statement below is FALSE?

• If making a decision strictly based on cost, Janelle's best option is State University.

• Valley College is providing Janelle more grants and scholarships.

• State University has a lower sticker price than Valley College.

• One factor that impacts net price is family income.

Which type of financial aid am I? I have limits on the amount that you can borrow based on your year in college. The federal government makes the interest payments on me while you are in college, and you make the interest payments on me after you graduate.

• Work-Study

• Subsidized federal loan

• Unsubsidized federal loan

• Grants

Ashley lives on campus. Which of the following cost categories can she most likely remove from her budget?

• Tuition for the semester.

• Meal plan for the semester.

• Monthly on-campus parking permit.

• Books for her classes.

When filing your FAFSA, you’ll need each of the following documents EXCEPT...

• Tax return from 2 years ago for you and your parents (in most cases).

• Social Security card, driver’s license, or proof of permanent residency.

• Bank and/or investment statements (if applicable).

• Proof of employment.

What is a good rule of thumb to consider when it comes to student loan debt?

• You should never borrow money to go to college because it is unlikely that you will be able to pay it back.

• You should borrow as much money as you can through private loans and then take out federal loans.

• You should borrow as much as your college says you should borrow as laid out in your financial aid offer letter.

• You should generally limit your borrowing to what you expect to earn as a starting salary when you leave college.