WorksheetsStudent Loans, Debt and Paying for College
Total questions: 57
Worksheet time: 56mins
Which term refers to the original amount of money you borrowed on a loan?
Interest
Principal
Amortization
Term
A loan lists its length as 36 months. Which statement identifies the same concept using the vocabulary from this lesson?
It states the principal of the loan
It states the interest charged on the loan
It states the terms of the loan
It states the amortization schedule of the loan
What is the correct formula for finding the total amount paid for a loan?
Principal × Interest
Principal − Interest
Principal + Interest
Interest ÷ Principal
Money borrowed from someone else with the expectation of paying it back.
SYNONYMS
credit, advance
cash
borrow
loan
jar
A person who agrees to pay off a loan if the original party does not pay
Collateral
Character
Character
Cosigner
Student loans are .....
like free money
ore often forgiven
must be paid back and almost never forgiven
only need to be paid back if you have a job
period during which repayment of the principal and interest of your loan is temporarily delayed.
Deferment
Forbearance
Consolidate
to stop making payments or reduce your monthly payment for up to 12 months. Interest will continue to accrue.
Deferment
Forbearance
Consolidate
State and community colleges are...
bad investments and should be avoided
are more expensive compared to private schools
are much cheaper than private schools
none of the above
What are the benefits of scholarships?
Scholarships limit educational choices
Scholarships only benefit the wealthy
Scholarships are a waste of time and money
Scholarships provide financial assistance, recognize achievements, and open doors to new opportunities.
What are the benefits of grants?
Grants provide financial support for projects and initiatives.
Grants are difficult to obtain and have strict eligibility criteria.
Grants are only available to large organizations.
Grants are a burden and create unnecessary paperwork.
How can scholarships help students financially?
Scholarships are only available to students with high grades.
Scholarships provide financial aid to cover educational expenses.
Scholarships are only available to students from wealthy families.
Scholarships are only available for certain fields of study.
What are some common eligibility criteria for scholarships?
favorite food, favorite movie, and favorite song
favorite color, height, and weight
number of siblings, hair color, and shoe size
academic achievement, financial need, community involvement, leadership skills, and specific talents or interests
How can students apply for scholarships and grants?
By researching and identifying available options, meeting eligibility criteria, gathering required documents, and submitting a complete application before the deadline.
By paying a fee to a scholarship and grant application service to apply on their behalf.
By waiting for the school to automatically award them scholarships and grants.
By asking their friends for recommendations and applying to those scholarships and grants.
What is the first step in the debt snowball method?
Pay off the debt with the highest interest rate first
List debts from smallest to largest by dollar amount
List debts from highest to lowest interest rate
Make minimum payments on all debts
What is the main psychological benefit of the debt snowball method?
It saves more money in the long run
It focuses on high interest rates first
It is easier to manage
It provides small psychological wins
What is the primary difference between the debt snowball and debt avalanche methods?
The interest rates of the debts
The total amount of debt to be paid off
The minimum payments on the debts
The order in which debts are paid off
According to the debt avalanche method, how should debts be prioritized?
Randomly
From highest to lowest interest rate
From smallest to largest by dollar amount
From largest to smallest by dollar amount
What is the purpose of maintaining minimum payments on other debts while focusing on one?
To accumulate more debt
To avoid late fees
To increase credit score
To reduce the principal amount
What does the debt snowball and avalanche methods aim to achieve?
Buying more assets
Being debt-free
Financial independence
Increase in debt
What are Private Loans?
Loans made by private organizations like banks, credit unions, and state-based/ affiliated organizations with terms set by the lenders.
Private loans are funded by the U.S. Department of Education and offer fixed interest rates identical to federal loans.
Private loans do not require a credit check or cosigner, making them accessible to all students regardless of financial history.
Private loans provide subsidized interest, meaning the government covers interest charges while you’re in school.
Federal vs Private what's the difference?
Private loans always have fixed interest rates, just like federal loans, but they’re slightly lower because banks compete with the government.
Federal loans are only for graduate students, while private loans are designed exclusively for undergraduates with financial need.
Many private loans require payments while in school (few allow deferment - temporary delay in repayment)
Federal loans require a strong credit score and collateral, while private loans are guaranteed by the government and don’t check credit history.
What should you NOT do when taking out loans?
Ignore interest rates.
Borrow more than you need.
Skip filing the FAFSA.
FAFSA=Free __________ for Federal Student Aid
Application
Advertisement
Allowance
Admission
Grants are monies that you do NOT have to pay back ?
True
False
Money for education awarded to students for their economic needs or their academic or athletic achievements
Scholarship
Student Loan
grant
A subsidized loan is when ____________________ pays the interest while you are in school.
the school
the parents
the borrower
the government
Interest can be defined as:
a charge for lending money
the amount owed for borrowing money
a charge for convenience of accessing money in your bank
An APR of 25.99% in decimal form is....
.02599
.2599
2.599
APR stands for
annual profit rate
annual percentage rate
annuity profit range
In order to qualify for Federal student loans…
You must have financial need
You must file the FAFSA
You must take out a private loan
A subsidized loan is when ____________________ pays the interest while you are in school, while an unsubsidized loan is when ___________________ pays the interest while you are in school.
the government; parents
the borrower; parents
the government; the borrower
Both an auto loan and a mortgage are examples of a secured debt.
True
False
The longer the loan term the less total interest you pay.
False
True
Longer loans typically have lower payments but accumulate more _?
interest
principal
fees
What is an unsecured loan?
A loan where you lose the paperwork
A personal loan taken out without providing security
A loan you don't have to re-pay
What is a secured loan?
The same as an unsecured loan
Money you lock in a safe
A loan taken out against an asset you own, for example a house
Federal student loans offer lower interest rates than private student loans
True
False
The time given by the federal government for a borrower to seek employment after graduating from college.
subsidized
award letter
grace period
unsubsidized
Which of the following statements is TRUE?
you can decrease the amount of interest you pay by paying more than the monthly payment
paying the exact monthly payment on time will decrease the loan term
the longer the loan term, the less interest you end up paying
you can save money by deferring the interest
Which of the following options does not have to be repaid?
Private loan
Grant
Unsubsidized federal student loan
Subsidized federal student loan
1. School 1 has a sticker price of $50,000 and offers $40,000 in grants and scholarships. School 2 has a sticker price of $15,000 and offers $3,000 in grants and scholarships. School 3 has a sticker price of $80,000 and offers $60,000 in grants and scholarships. School 4 has a sticker price of $10,000 and offers $1,000 in grants and scholarships. Which school has the lowest Net Price?
School 1
School 2
School 3
School 4
A method of debt repayment whereby the borrower prioritizes paying down debts with the smallest balances first is called . . .
Credit Crisis Management
Credit Score Enhancement
Debt Snowball Method
Debt Avalanche Method
A method of debt repayment whereby the borrower prioritizes paying down debts with the highest interest rates first is called the. . .
Bankruptcy Avoidance Method
Debt Snowball Method
Debt Avalanche Method
Credit Recovery Method
When you use the Debt Snowball Method, you list all of your credit card balances from the lowest to highest and pay as much as you can toward the smallest debt (more than the minimum balance).
True
False
When you use the Debt Avalanche Method (select all that apply):
you focus on paying off the highest interest rate first
you get quick results
it takes discipline
your debt incurs more interest
Which of the following is not recommended in the debt snowball method of getting out of debt?
List your debts in order from smallest to largest balance and focus on paying the smallest debt off first.
Every extra dollar you get should be thrown at the largest debt first.
Attack your debt with intensity.
Every time you pay off a debt, you add its old minimum payment to your next debt payment.
