Chapter 3 Study Guide PF

Which of the following statements are FALSE about the value of a college education? (Check all that apply)

• A high school graduate can expect to earn about the same as a college graduate.
• If you start college but don't finish, your pay will be closer to the level of a high school graduate than the level of a college graduate.
• A college graduate can expect to earn, on average, about $40,000 more than a high school graduate over a career.
• College is only valuable if you want to increase how much you earn.

While researching college scholarships to apply for, you see an ad that says, "Enter a few pieces of information, pay $39.99 per month, and we guarantee to win you 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 they win you 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 should not pay money to win scholarships, and you should never enter your social security number into unknown websites.

The FIRST form of financial aid you should accept is...

• Work-Study
• Federal Loans
• Scholarships and Grants
• Private Loans

The SECOND form of financial aid you should accept is....

• Work-Study
• Federal Loans
• Scholarships & Grants
• Private Loans

In terms of student loans, you should apply for and accept private student loans instead of federal student loans.

• True
• False

What is the formula used to calculate net price of a college?

(a)  

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

• Greenlawn College is providing Janelle with more grants and scholarships.
• The sticker prices of both schools are impacted by a family's total annual income.
• State U has a lower net price than Greenlawn College.
• If making a decision strictly based on cost, Janet's best option is State U.

For a subsidized federal student loan, 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.

• False
• True

Anita is about to start her first year of college. She knows that while it may seem early, it's a good idea to think about ways she can minimize her total student loan debt while she is still in college. Which of the following steps will be MOST effective in helping her minimize her student loan debt and prepare for loan repayment once she graduates?

• Wait until after she graduates to contact her student loan servicer; there won't be much to discuss if she contacts them during her freshman year.
• Start researching repayment options and plans only when she is about to graduate.
• Accept federal unsubsidized student loans first. Then, if she has any remaining balances to cover, accept federal subsidized student loans.
• Make as many interest payments as possible while she is still in school to minimize her total debt after graduation.

Which of the following is NOT needed when filling out your FAFSA (Free Application for Federal Student Aid) online?

• Social Security Number
• Bank/Investment Statements
• Proof of Employment
• Username & Password for FSA ID