Credit, Loans, and Education ROI

A positive return on investment for education happens when

• your earnings potential is higher than the cost of your education

• you calculate earnings after working for one year after college

• you attend a public university and do not take out loans

• you use federal student loans to attend a private college

If your earnings potential is higher than the cost of your higher education, you will have a

• negative return on investment for higher education

• neutral return on investment for higher education

• positive return on investment, depending on your major

• positive return on investment for higher education

Which of these is something to consider when trying to get a positive return on investment for higher education?

• The total cost of attendance

• The cost of a meal plan

• The cost of tuition

• The cost of books

Jobs and careers that require degrees or certificates generally _____ jobs that require little or no training.

• pay about the same amount of money as

• pay more money than

• have fewer responsibilities than

• earn less money than

The total cost of attending a university includes

• tuition, housing, food, books, and other costs

• student loans and federal grants

• tuition, scholarships, grants, and loans

• scholarships, grants, and other forms of financial aid

Carol became an accountant by starting her training at a community college, followed by transferring to a bachelor's degree program at her local public university. How likely is it that she will have a positive ROI?

• Very likely, because attending college guarantees a job after graduation.

• Not at all likely, because she did not attend a four year college for all four years.

• Very likely, because she spent less money the first two years of college and is currently employed.

• Not at all likely, because she is not in a profitable career field.

Which of the following best describes a loan?

• A type of insurance coverage for unexpected losses

• A borrower promises to repay money from a lender

• A government grant for education

• A tax deduction for mortgage interest payments

Margo wants to purchase a new car. She doesn’t have enough in savings to cover the cost. She decides to look into loans from her bank. How can taking out a loan help Margo with her car purchase?

• It can help by reducing her total amount of debt

• It can help by not requiring any immediate down payment

• It can help by spreading out the expense over time

• It can help by having no impact to her credit score

Which best describes the difference between secured and unsecured loans?

• Secured loans require collateral, while unsecured loans do not

• Secured loans usually have higher interest rates than unsecured loans

• Secured loans do not appear on your credit report, while unsecured are reported

• Secured loans have more flexible payment plans than unsecured loans

Elliott renovates his home using a loan that requires him to sign over the title to his car if he doesn't pay as promised. What type of loan does Elliott have?

• Education loan

• Interest-free loan

• Secured loan

• Unsecured loan