WorksheetsEverfi - Pathways: Financing Higher Education Test Bank
Total questions: 150
Worksheet time: 3hrs 30mins
When paying for higher education, scholarships and grants can be considered _____.
free money
loans
investments
taxes
The biggest difference between scholarships and loans is that scholarships are considered _____ but loans must be paid back.
free money
a financial burden
a loan
a debt
Which of the following are considered "free money" when it comes to financing higher education?
Military programs
Scholarships and grants
Loans
Work-study programs
When paying for higher education, money that you borrow and must pay back later comes from _____.
scholarships
grants
work-study programs
loans
Loans are different from scholarships and grants since ____.
loans must be paid back
loans don't earn interest
loans don't need to be paid back
loans are free money
Which method of funding higher education accrues interest until it is paid back?
Grants
Scholarships
Loans
Work-study programs
Which of the following should you consider first when trying to pay for higher education?
Loans
Work-study programs
Scholarships and grants
Military programs
Why is it important to consider loans last when paying for higher education?
Scholarships and grants need to be paid back but loans are free money.
Loans need to be paid back but scholarships and grants are free money.
Loans give better interest rates when you apply later.
Scholarships and grants give better interest rates when you apply for them early.
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.
Loans are free money that do not need to be paid back.
Loans give better interest rates when you apply early.
Scholarships and grants give better interest rates when you apply early.
What do you need to submit in order to access need-based federal aid and federal loans?
Credit report application
The financial aid application at your institute of higher education
The FAFSA
Financial aid application at your high school
To access need-based federal aid, including federal loans you will need to submit _____.
a financial aid application at your high school
the FAFSA
a financial aid application at your institute of higher education
a credit report application
What is the purpose of the FAFSA?
To access need-based federal aid, including federal loans
To apply to an institute of higher education and access aid from that school
To apply for community-based scholarships and local bank loans
To access loans from your local bank and the federal government
The FAFSA is unlike other financial aid applications because ____.
it is connected to both academics and sports
each state has its own deadline and you need to apply every year
there is a set amount you can apply for based on your location
it can only be applied to through your institution of higher education
When applying for the FAFSA, which of the following is not true?
Since it is a federal application, there is one application deadline for the entire country.
You need to apply the year before you attend higher education.
You must fill it out every year you attend higher education.
Every state has its own deadline.
When applying for the FAFSA, which of the following is not true?
Every state has its own deadline.
The application is available once you have been accepted to a school.
You need to apply the year before you attend higher education.
You must fill it out every year you attend higher education.
Why is it necessary to include your family's income and tax information on a FAFSA application?
The federal government uses your financial aid information to recommend schools and classes for you.
The federal government awards aid and loans based on your family's financial needs.
The federal government can place you in different schools based on your family's income.
The federal government uses your financial information to help you decide what classes to take.
Why is it necessary to include your family's income and tax information on a FAFSA application?
They are used to analyze your Honors Class Eligibility (HCE) and what classes would most fit your profile.
They are used to determine the type of housing and meal plans your school can offer to you.
They are useful in determining your Contribution Quotient (CQ) which is the percentage of aid you deserve.
They are used to calculate your Expected Family Contribution (EFC) 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?
Their notarized signature on the form.
Information about their income and taxes.
Documents that show all assets, such as cars, houses and stocks.
Copies of their credit reports.
The FAFSA asks you to list the higher education institutions you will apply to because the federal government will _____.
determine if you can afford any of them
send a letter of recommendation on your behalf
send your student aid report directly to them
let you know if there is any additional aid offered by the school of your choice
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.
Yes. The federal government needs to know exactly who to send the financial aid to.
No. There is no space on the application to list an institute of higher education.
Yes. You can't apply for federal financial aid without an acceptance letter.
True or false: The FAFSA requires you to list the school that you will be attending as part of the application process.
True. You can't apply for federal financial aid without an acceptance letter.
False. It is important to apply early, even before you have been accepted to a program.
True. The federal government needs to know exactly who to send the financial aid to.
False. There is no space on the application to list an institute of higher education.
Scholarships awarded for high GPAs or test scores are based on _____.
financial need
heritage
merit
association membership
Merit scholarships can be awarded for all of the following except _____.
community service
leadership roles
high GPA or test scores
financial need
Merit scholarships can be awarded for high GPAs or test scores, honors recognition, leadership roles and _____.
community service
heritage
association membership
financial need
Which of the following is not a resource to find scholarship opportunities?
Community associations
Bank loan officers
School counselors
Institutes of higher education
Which school staff members would most likely have up-to-date information about scholarship opportunities for which you may be eligible?
Cafeteria staff
Security guards
Administrative assistants
School counselors
How can the careers or hobbies of your family members help you earn scholarship awards?
Some institutes of higher education require that your parents are employed.
Some employers and associations offer scholarships to participants and their family members.
Some institutes of higher education require you to declare a hobby when starting.
Some employers allow time for workers to take online courses.
Which financial aid program is needs-based and pays wages up to a certain number of hours?
Scholarships and grants
Work-study
Reserve Officer Training Corps (ROTC)
Subsidized loans
Which financial aid program may require you to serve in the military after earning a degree?
Work-study
Reserve Officer Training Corps (ROTC)
Subsidized loans
Scholarships and grants
Why aren't financial aid programs like work-study and military programs considered free money?
Free money can only come from higher education institutes and these programs are from the government.
These special programs charge interest on the money that is awarded.
Work study and military programs actually are considered free money.
These special programs have requirements to either work or serve in order to receive the money.
Which is an example of income-driven repayment plan for student loans?
Payments are the same every month for 10 years.
Payments start lower and increase every 2 years.
Payments are low and can last up to 25 years.
Payment amounts are based on a percentage of what you earn.
Which is an example of an extended repayment plan for student loans?
Payment amounts are based on a percentage of what you earn.
Payments are low and can last up to 25 years.
Payments start lower and increase every 2 years.
Payment amounts are based on a percentage of your income.
Which is an example of a graduated repayment plan for student loans?
Payments start lower and increase every 2 years.
Payments are the same every month for 10 years.
Payment amounts are based on a percentage of what you earn.
Payments are low and can last up to 25 years.
If Emmett wants to pay off his student loan by making monthly payments for 10 years, what type of repayment plan is best for him?
Standard repayment plan
Extended repayment plan
Graduated repayment plan
Income-driven repayment plan
If Gabi wants to pay off her student loan by starting with a low amount and then increasing it every two years, what type of repayment plan is best for her?
Standard repayment plan
Extended repayment plan
Graduated repayment plan
Income-driven repayment plan
If Alejandro wants to pay off his student loan by basing it on how much he is earning at his job after graduation, what type of repayment plan is best for him?
Standard repayment plan
Extended repayment plan
Graduated repayment plan
Income-driven repayment plan
High student loan payments can impact all of the following life decisions except _____.
being able to afford food
getting married and having children
buying a car
buying a house
Which of the following is an example of how high student loan debt can impact a person's life decisions?
High student loan debt can be used as collateral and improve a person's chance at buying a car.
A person may choose to buy a house instead of renting an apartment since they can afford a large down payment.
High student loan debt can make it easier to borrow more and continue studies in graduate school.
A person may choose to use public transportation instead of buying a car since they can't afford a down payment.
Which of the following is an example of how high student loan debt can impact a person's life decisions?
High student loan debt can make it easier to borrow more and continue studies in graduate school.
A person may choose to rent instead of buying a home since they can't afford a down payment.
A person may choose to buy a car instead of leasing since they can afford a large down payment.
High student loan debt can be used as collateral and improve a person's chance at buying a house.
Having a high debt-to-income ratio or defaulting on your loan can bring down your credit score. How can a low credit score on your credit report affect you?
It can make it easier to get new credit cards.
It can make it much harder to borrow money in the future.
It can make it harder to be accepted into graduate schools.
It can make it much easier to borrow money in the future.
Having a high debt-to-income ratio or defaulting on your loan can bring down your credit score. A low credit score on your credit report can _____.
make it much harder to borrow money in the future
make it difficult to be accepted into graduate schools
make it much easier to borrow money in the future
make it easier to get new credit cards
How could defaulting on a loan or having a high debt-to-income ratio impact your future opportunities?
It can improve your credit score and make it easy to borrow money for big purchases like a house or car.
There is no impact on future opportunities.
It can block affordable options in your searching algorithms.
It can lower your credit score and make it difficult to borrow money for big purchases like a house or car.
One consequence for defaulting on a loan is having your transcript withheld. How could this affect you as you graduate?
You will not be allowed to walk in the graduation ceremony.
You may not get a job that requires a transcript.
You will not get any credits for the last semester of your studies.
You automatically fail all of the classes in your last semester.
One consequence for defaulting on a student loan is loan acceleration. What does this mean?
You must pay the loan back twice as fast.
Bill payment is required every week.
You owe the amount of your loan and interest immediately.
You must prepay all the interest on the loan now.
One consequence for defaulting on a loan is to have your wages garnished. What does this mean?
When you get a raise or increased wages, your loan payments will also increase.
A garnish is a bonus payment that you need to make in order to get out of default.
Money is taken directly out of your paycheck to cover your debt.
A garnish is an additional tax that will be paid to the state as a criminal penalty for defaulting on your loan.
Which of the following is not true if you default on a student loan?
You may be taken to court and have to pay all fees.
You will have your passport taken away.
You may not be eligible for additional financial aid for future studies.
Your tax refund may be withheld.
Which of the following is not true if you default on a student loan?
You will not be allowed to request a deferment for the loan.
You may have money taken directly out of your paycheck to cover your debt.
You will not be allowed to open any bank accounts or make investments.
You may not be eligible for additional financial aid for future studies.
Which of the following is not true if you default on a student loan?
You will not be allowed to request a deferment for the loan.
You may have money taken directly out of your paycheck to cover your debt.
You may be taken to court and have to pay all fees.
You will have your degree taken away.
In order to qualify to refinance a student loan, you will need _____.
a good credit score and good income-to-debt ratio
a co-signer with a high income
a history of late payments
a low credit score
Which of the following is not a good reason to refinance a student loan?
You can get a lower interest rate
You want to combine loans
You are about to move to a new home
You want to lower your payments by extending the loan term
What happens when you refinance a student loan?
You apply for the loan a second time if you are denied for any reason.
A lender pays off your existing loan and offers a new loan with a different interest rate, payment schedule and terms.
You choose a new interest rate and payment schedule to better fit your ability to pay.
The lender makes your submit your application again since it was not completed accurately.
Opportunities to reduce or wipe away part of a loan amount based on your public service or by being a teacher in a low-income public school are called _____.
deferment programs
forgiveness programs
default programs
refinance programs
What is a loan forgiveness program?
A program that reduces or wipes away the amount of your loan if you are eligible.
A legal action that can be taken if the loan company has discriminated against you.
A policy of most loan companies where up to 6 late payments are accepted without penalties.
A program that allows you correct mistakes on a loan application.
Which of the following may not make you eligible for loan forgiveness?
Having a qualifying public service job like working in government or in a non-profit
Teaching in a low-income public school
Being in an entry-level position for 2-3 years
Being on an income-driven repayment plan that lasts for 20 or 25 years
When using the 50-30-20 rule to budget, what category are loan payments in?
Wants
Savings
Needs
Investments
Taking care of your _____ first is a good budgeting strategy that includes covering your loan payments.
Wants
Savings
Needs
Investments
What are two ways that can help you keep a budget while trying to reduce debt load from loans?
Tracking expenses and evaluating spending
Paying interest only on loans and tracking expenses
Evaluating spending and paying interest only on loans
Focusing on wants and savings
When creating a budget to repay your student loans, you should plan to pay back _____.
only interest
fees and penalties
interest and principal
only principal
When creating a budget to repay your student loans, what do you need to pay in order to fully pay it off?
Principal and interest
Interest only
Principal only
Application fees
When creating a budget to repay your student loans, you can save money by paying only the interest.
True because paying interest means monthly payments will be small.
False because it is not possible to only pay the interest.
True because paying only the interest reduces the length of the loan and reduces the total amount you pay in the long-term.
False because paying only interest lengthens the life of the loan and increases the total amount you pay in the long-term.
Which type of loan is based on financial need?
Subsidized loans
Unsubsidized loans
Private loans
Online lender loans
The type of loans that are based on financial need are _____.
subsidized loans
unsubsidized loans
private loans
payday loans
Subsidized loans are different than other types of loans because they _____.
are awarded by financial institutions
are based on financial need
are awarded by institutes of higher education
have zero interest
Which type of loan has the accrued (added) interest paid for by the Department of Education while you are enrolled at least half-time in an institute of higher education?
Private loan
Online lender loan
Subsidized loan
Unsubsidized loan
Which type of loan has a higher borrowing limit, a subsidized or unsubsidized loan?
Unsubsidized loan
Subsidized loan
They are the same
It depends how much financial need you have
If a person qualifies, why is it better to accept a subsidized loan before an unsubsidized loan?
Subsidized loans are in your parent's name which means you do not have to pay them back.
Since subsidized loans have higher borrowing limits, you can pay for more classes.
The accrued (or added) interest on a subsidized loan is paid by the Department of Education while you are enrolled at least half time.
Subsidized loans have zero interest.
Federal loans are from _____.
financial institutions like banks and credit unions
the government
the stock market
area businesses
What do you need to complete in order to qualify for a federal student loan?
Standardized test (SAT or ACT)
Loan application
Credit report
The FAFSA
Which statement best describes how federal student loans are different than private student loans?
Federal loans look at your credit history carefully and have variable interest rates.
Federal loans always have a fixed interest rate and you qualify regardless of your credit score.
Federal loans require a cosigner and some type of collateral.
Federal loans are administered by the institute of higher education, which is why their rates are better.
Private student loans are from _____.
area businesses
the stock market
the government
financial institutions like banks and credit unions
Which statement is true regarding how private and federal loans use your credit score (borrowing history) when approving applications?
Both federal and private loans look carefully at your credit score.
Only federal loans look at your credit score.
Only private loans look at your credit score.
Neither federal nor private loans look at your credit score.
Which statement best describes how private student loans are different than federal student loans?
Private loans can have fixed or variable interest rates and there are many options for paying them back.
Private loans don't look at your credit score and they do not allow a parent or guardian to cosign.
Private loans have origination fees which can increase the cost of the loan.
Private loans are always required to be paid back within five years.
Why is it possible that you may get less money than the loan amount you have borrowed?
You may not qualify for the full amount.
The higher education institution gets to keep some of your loan amount.
Interest charged on loans can reduce the full amount borrowed.
Fees can be subtracted from the borrowed amount.
What is an origination fee on a loan?
A fee charged by loan companies to pay for shipping and handling of loan materials.
A fee that is charged by a lender to make up for the cost that they spend giving you a loan.
A fee that is based on where the loan is coming from.
A fee you pay depending on where you live.
If you borrow $10,000 with a 1% origination fee of $100, how will it affect the loan money you receive and how much you must pay back later?
You receive $9,900, but must pay back the full $10,000 later.
It doesn't have an impact on what you receive or pay back later.
You only have to pay back the $100 origination fee.
You receive $10,100, and must pay it all back later.
How often do you need to apply for a federal student loan?
Only once
Every semester
Every other year
Every year
When do you need to apply for a federal student loan?
Every year, based on the deadline for your state
Before you start at a higher education institution
After you've decided which higher education institution to attend
Before you start at a higher education institution and again if you take more than four years to graduate
How often do you need to fill out the FAFSA in order to apply for federal student loans?
Every semester
Every year
Only once
Every other year
Who is most likely to have general information about financial aid at many different institutes of higher education?
High school counselor
Financial aid officer at a university
A loan officer at a local financial institution
A teller at a local financial institution
If you are looking for information about financial aid at many different institutes of higher education, who should you contact?
Financial aid officer at a university
A loan officer at a local financial institution
High school counselor
A teller at a local financial institution
When researching financial aid options, who should you contact first?
Loan officer at a local financial institution
High school counselor
Financial aid officer at a higher education institution
High school principal
Which resource would not have reliable information about student loans?
School counselor
Money wiring agency
Financial aid officer
Loan officer
Who would not have reliable information about student loans?
Loan officer
Financial aid officer
Tax accountant
School counselor
Which resource would not have reliable information about student loans?
Loan officer
Financial aid officer
School counselor
Teller at a financial institution
Who would most likely be a cosigner on some student loans?
A parent or guardian
A loan officer
A financial aid officer
A school counselor
For student loans that require a cosigner, who is that person?
A witness who can prove who you are by signing the application.
A parent or guardian who shares the responsibility of the loan with you.
The loan officer who signs the documents after you.
A financial aid officer who also signs the loan.
Why would you need a cosigner for certain student loans?
If you don't have a credit history, a cosigner's credit score will be used to secure certain student loans.
If you don't currently have a source of income, you would need a cosigner for certain student loans.
If you are going to an institute of higher education out of state from where you live, you would need a cosigner for certain student loans.
If you don't have a credit card in your name yet, you would need a cosigner with a credit card in their name for certain student loans.
What happens if you don't pay back a cosigned loan on time?
Nothing, as long as you give notice.
It will impact just your credit score.
It will impact just the credit score of the person who cosigned with you.
It will impact your credit score and the credit score of the parent or guardian who cosigned with you.
What is a parent loan?
A loan that a parent or guardian takes to pay for personal expenses while you are studying at an institute of higher education.
A loan that is taken out for parents who are studying. It helps with their educational and childcare expenses.
A loan that is taken out for your education by a parent or guardian and they are responsible for paying it back.
A loan that a parent or guardian takes to pay for personal expenses while you are studying at an institute of higher education.
What is the difference between a parent loan and a loan that your parents or guardians cosign with you?
The responsibility of a parent loan is solely on them but a cosigned loan means you share the responsibility.
They are the same. The co-signatures are needed on both to prove you are related.
A cosigned loan means that your parents or guardians are witnesses to your signing. They only have responsibility on parent loans.
The responsibility of a parent loan is solely on them but a cosigned loan means you share the responsibility.
A positive return on investment for higher education _____.
happens when you get a really good scholarship and discounts on tuition
is when your earnings potential is higher than the cost of your education
is when you land a job after graduating
happens when the costs of higher education are less than you expected
If your earning potential is higher than the cost of your higher education, you will have a _____.
positive experience while earning a degree
negative return on investment for higher education
negative experience while earning a degree
positive return on investment for higher education
Which of these is not something to consider when trying to get a positive return on investment (ROI) for higher education?
The cost of attendance.
The type of food that is offered on the meal plan.
Your expected career income.
The financial aid package that is offered to you.
Jobs and careers that require degrees or certificates generally _____ jobs that require little or no training.
earn more money than
earn less money than
have the same salary as
are less demanding than
Higher education typically has a positive return on investment because _____.
jobs and careers that require a degree or certificate generally earn higher salaries
it guarantees employment immediately after graduation
it is always less expensive than other forms of education
it provides instant wealth and success
Which is an example of why higher education typically has a positive return on investment (ROI)?
The jobs you can get with higher education will earn more money than jobs without a degree or certificate.
Higher paying jobs come with experience, not with earning a degree or certificate.
Higher education usually results in a lot of debt which can be difficult to afford.
The highest paying jobs come with a high school diploma which is an important reason to finish high school.
The full cost of attendance to an institute of higher education, including tuition, room and board, books and other costs is known as _____.
a full ride
the net cost
the sticker price
the reduced price
The sticker price of an institute of higher education includes _____.
tuition, housing, food, books and other costs
loans and their associated fees
tuition, scholarship, grants and loans
scholarships, grants and other forms of financial aid
What is a sticker price for higher education?
The price of tuition broken down into monthly payments.
The cost of each class broken down by how much each credit is worth.
An analysis of how much you will pay after scholarships and grants have been accepted.
The price of attendance including tuition, room and board, books and other costs.
Buying used textbooks, cooking your own meals and biking instead of driving can all reduce the _____.
tuition for any given school
full costs of higher education
the overall amount of grants
scholarship amounts awarded
Which of the following is not an example of how you can reduce the full cost of higher education?
Buy all books at the bookstore as early as possible.
Cook your own meals instead of using a meal plan.
Live in shared housing to share costs.
Live close to campus so you can bike or walk to class.
Which of the following is not an example of how you can reduce the full cost of higher education?
Buy used textbooks and rent other needed ones.
Live at home and commute to campus nearby.
Eat at restaurants and fast food places regularly.
Live on campus to reduce transportation costs.
Scholarships, grants and work-study money all reduce the _____ of higher education.
net cost
duration
difficulty
popularity
Why are net costs of higher education different than sticker prices?
Sticker prices include all scholarships, grants and special program financing.
Net costs are higher since they include interest charged to basic costs.
Net costs include all scholarships, grants and special program financing.
Sticker prices are higher since they include interest charged to basic costs.
Are net costs or sticker prices lower for higher education and why?
Net costs are lower since they don't include interest charged to basic costs.
Sticker prices are lower since they include all scholarships, grants and special program financing.
Net costs are lower since they include all scholarships, grants and special program financing.
Sticker prices are lower since they don't include interest charged to basic costs.
Which institution will most likely have the lowest sticker price?
Public 4-year university
Private 4-year university
Community college
A certificate program
How can attending a community college help create a positive return on investment for higher education?
It can extend your studies by two years.
You spend less money the first 2 years and then transfer to a 4-year institution.
Since community colleges are intense, they cover all 4 years of college in 2 years.
Community colleges generally charge less money for their books.
Choosing the higher education institution with the cheapest sticker price might be a bad idea because _____.
sticker prices always have hidden costs which may increase the overall costs
more expensive schools may be cheaper once the net cost has been determined
cheaper schools usually charge more for housing which is not a part of a sticker price
cheaper schools usually will not allow you to apply for financial aid
The ____ shows how long the average student takes to earn a degree and this can be helpful in determining the return on investment at different institutions.
graduation rate
sticker price
student body ratio
net cost
Taking more than four years to graduate will increase costs and may impact a return on investment. What could you check to see how long most students take to finish at an institute of higher education?
net cost
graduation rate
sticker price
student body ratio
Why would finding graduation rates be helpful in determining an institution's return on investment?
It shows that the value of the education can increase over time, improving a return on investment.
A school that shows students take more years to graduate may show that the quality of the classes is not great.
Taking longer to complete higher education means that you savor the learning and this increases a return on investment.
Taking more than four years to graduate will increase costs and may impact return on investment.
A ____ can help you estimate how much money you might get in scholarships and grants at a higher-education institution.
return on investment calculator
clearance calculator
net price calculator
sticker price calculator
What can help you estimate how much money you might get in scholarships and grants at a given institution of higher education?
Net price calculator
Sticker price calculator
Return on investment calculator
Clearance calculator
A net price calculator _____.
helps estimate the amount of money you might get in scholarships and grants
is used to calculate the net worth of a company
predicts future stock market trends
calculates the total cost of groceries
Researching the average earnings by major and career can help you determine the ____ of an institute of higher education.
return on investment
sticker price
net cost
available scholarships
Why would researching the average earnings by major and by career be useful to you as you choose an institute for higher education?
It can help you figure out the sticker price.
It can help you determine the net costs.
It can help you calculate the return on investment.
It can help you decide what types of classes to take.
Why would researching the average earnings by major and by career be useful to you as you choose an institute for higher education?
You can anticipate the return on investment based on how much you could earn.
You can calculate the return on investment based on the types of classes that they offer.
You can hypothesize the return on investment based on the net cost.
You can determine the return on investment based on the sticker price.
Jeremiah works at a pet store. He went to a community college but didn't finish. He has some student loans now. What kind of return on investment (ROI) does Jeremiah demonstrate?
Negative ROI
Positive ROI
Neutral ROI
Can't determine ROI
Upon graduation, Anna got a high-paying job as a lab technician. She took five years to graduate from a public university and took out a lot of loans. What kind of return on investment (ROI) does Anna demonstrate?
Negative ROI
Positive ROI
Neutral ROI
Can't determine ROI
Luis repairs air conditioners. He earned a certificate in 6 months and paid for it with one loan. He earns a good salary now and will pay off his loan in two years. What kind of return on investment (ROI) does Luis demonstrate?
Negative ROI
Positive ROI
Neutral ROI
Can't determine ROI
What are you calculating if you add an estimate of tuition, fees, room and board, books, supplies, and other higher education expenses?
Cost of Attendance (COA)
Expected Family Contribution (EFC)
Financial aid
Grant and scholarship costs
How is cost of attendance (COA) determined at an institute of higher education?
It's based on tuition so it is calculated from the number of classes you enroll in.
It is an estimate of tuition, fees, room and board, books, supplies and other expenses.
It combines financial aid, what your family can pay, plus tuition and room and board.
It is the cost of tuition plus taxes.
If you calculate the cost of attendance (COA) at an institute of higher education, what are you including?
Grants and scholarships
Loans and special programs such as work-study and ROTC
Tuition, fees, room and board, books, supplies and other expenses.
Interest earned on loans, grants and scholarships
What do the initials EFC mean?
Expected Fraternity Cooperation
Estimated Financial Conditions
Enrolled Financial Classes
Expected Family Contribution
What is considered by the federal government to be what your family will be able to pay per year toward your school expenses?
Expected Family Contribution (EFC)
Projected Financial Aid Package (PFAP)
Cost of Attendance (COA)
Family Loan Savings Plan (FLSP)
What does Expected Family Contribution (EFC) mean?
How much a bank needs to see in your accounts before it will offer any student loans.
How much the federal government expects your family will be able to contribute per year toward your school expenses.
How much your institute of higher education expects your family to have on hand in case financial aid is not available.
How much the federal government expects the college to contribute per year toward your school expenses.
Financial aid letters show your aid and costs of attendance for _____.
one year
one semester
the entire time you plan on attending
four years
Which of the following is true about financial aid letters from institutes of higher education?
They only describe the types of financial aid you are eligible for; you then must apply for it all.
They include funding for every year that you are enrolled in school.
They only include aid for one year. You must reapply for financial aid every year.
They include funding that must be accepted as a full package.
Financial aid letters from institutes of higher education show your yearly aid and costs for attending. This means that you will need to ____.
apply for admission now that you know the financial aid offer
accept everything that they offer
accept your aid faster than other students
reapply for aid every year
What do you need to consider to decide if you can afford to go to an institute of higher education?
Tuition costs, scholarships, and grants
Cost of Attendance (COA) and loan costs
Cost of Attendance (COA) and financial aid
Terms of work-study offers
If a school offers a lot in financial aid, what else do you need to consider when trying to determine whether it will fit your budget?
Terms of work-study offers
Cost of Attendance (COA)
Expected Family Contribution (EFC)
Loan interest rates
All answers are correct.
Along with the amount of financial aid, which is the most important to pay attention to when trying to determine financial aid costs in relation to your personal budget?
The cost of tuition
The actual cost of attendance
The amount of money and hours you can earn through work-study
The terms and conditions of subsidized loans
If you are comparing the financial aid letters from two higher education institutions, how can you determine which one is more affordable?
The higher education institution that gives more financial aid will be more affordable.
The higher education institution that has a lower cost of attendance will be more affordable.
Subtracting the financial aid offer from the cost of attendance will help you determine which one is more affordable.
Adding the financial aid offer to the cost of attendance will help you determine which one is more affordable.
Does an offer of more grants and scholarships mean one school is cheaper than another school?
No, financial aid offers have to be subtracted from a school's cost of attendance to determine how affordable a school is.
No, you have to calculate the interest rates you will need to pay back on the grants.
Yes, more financial aid means you will pay less, which makes it the cheaper school.
Yes, grants and scholarships are free money, which means you will pay less.
What's the best advice to give to a student who says: "It's easy to determine which school is more affordable; just look at how much financial aid they give you!"
Not true! You have to consider the interest rates on grants and scholarships to determine how much you will really pay.
Not true! Financial aid offers have to be subtracted from a school's cost of attendance to determine how affordable a school is.
That's right! More financial aid means you will pay less than you will at other schools.
That's right! The more loans you get, the less money you will have to pay for higher education.
When determining how much money you will need to borrow in loans for each year of your higher education, you need to take into account _____.
The amount of money you will still need after subtracting scholarships, grants, work study, and personal and family contributions.
The amount of money you will still need after all financial aid is subtracted.
The amount of money you will still need after taking into account your Expected Family Contribution (EFC).
The number of years you want to be paying back loans during your career.
Which of the following items should not be considered when determining how much money to borrow in loans to pay for your higher education?
The amount you will still need after financial aid is awarded.
The number of years that you will be in school.
The interest rate of the loan.
The amount of money that your family can contribute each year.
The amount of money you will still need after subtracting scholarships, grants, and work study will help determine the amount of money _____.
you need to borrow in loans or pay out of pocket
to accept in grants and scholarships
to use for room and board, books and other expenses
to set aside in savings
A(n) _____ is a percentage of the loan that is charged to cover the cost of giving the loan.
origination fee
administration fee
finder's fee
learning tax
A percentage of the loan that is charged to cover the cost of giving the loan is known as _____.
a finder's fee
an origination fee
the administration fee
a higher education penalty
What is an origination fee on a loan?
A fee for the way you sign or co-sign a loan.
The charge from the loan company for sending your loan to your school.
A fee that is charged for a loan depending on where you go to school.
A percentage of the loan that is charged to cover the cost of giving the loan.
Which of the following terms is a percentage of the loan that you pay on top of what you have borrowed?
Escrow
Interest
Principal
Balance
Which type of interest can change over the life of a loan?
Variable interest
Fixed interest
Annual percentage rate (APR)
Principal interest
Which type of interest does not change over the life of a loan?
Variable interest
Fixed interest
Annual percentage rate (APR)
Principal interest
What additional costs do you pay each year to borrow money in loans? This includes both interest and fees.
Annual percentage rate (APR)
Variable interest
Fixed interest
Origination fees
What is an annual percentage rate (APR)?
The charge from the loan company for sending your loan to your school.
Additional costs paid each year in order to borrow money in loans, including both interest and fees.
A percentage of the loan that is charged to cover the cost of giving the loan.
It's another term for variable interest.
The ____ is the additional costs you pay each year in order to borrow money in loans, including both interest and fees.
annual percentage rate (APR)
monthly interest rate
loan origination fee
credit score
The shorter a loan's term, the _____.
lower the monthly payment and less interest paid over the life of the loan
higher the monthly payment but less interest paid over the life of the loan
higher the monthly payment and higher the interest paid over the life of the loan
lower the monthly payment but more interest paid over the life of the loan
If you want to pay less interest over the life of your loan, you should make a ______ monthly payment.
high
low
suggested
regular
How does a loan's term, or number of years to repay a loan, affect your monthly payments and amount owed?
The longer the term, the higher your monthly payment but less interest over the life of the loan.
The shorter the term, the lower the monthly payment but more interest paid over the life of the loan.
The shorter the term, the higher your monthly payment but the less interest over the life of the loan.
The longer the term, the lower your monthly payment but less interest over the life of the loan.
