WorksheetsCredit, Loans, and Education ROI
Total questions: 14
Worksheet time: 7mins
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
How do loan terms affect the cost of credit?
Longer loan terms have lower monthly payments and lower interest
Shorter loan terms have higher monthly payments and lower overall interest
Loan terms are based on your pay schedule and how often you get paychecks
Loan terms only apply to loans with collateral but do not apply to those without collateral
Aisha needs a loan to finance her latest startup. She wants a loan with the lowest overall interest costs. She’s considering a 3-year loan with an 8% fixed interest rate or a 5-year loan with a 6% fixed interest rate. Why would Aisha pick the 3-year loan?
It has a lower total cost.
It has a smaller monthly payment
It has a lower interest rate
It has a higher loan amount
A lender offers Frank a high-interest loan based on how much he makes at his job. He’ll have to pay it back quickly too, within the next month. Which type of predatory loan offer did Frank experience?
Bait and switch
Payday loan
Hidden fees
Phishing scam
Emery applies for a loan online to help cover living costs while in college. Later, she notices her payments aren’t impacting the balance much. Looking closer, she finds extra fees in the agreement. Which type of predatory loan offer did Emery experience?
Bait and switch
Payday loan
Hidden fees
Phishing scam
