MC#1
Which of the following statements is TRUE about the value of a college degree?
a. A high school graduate can expect to earn about the same as a college graduate
b. Every college graduate can expect to have a starting salary over $60,000 right after college
c. A college graduate can expect to earn, on average, more than a high school graduate over a career
d. A college graduate typically earns less than someone with a high school diploma for the first 10 years
C. A college graduate can expect to earn, on average, more than a high school graduate over a career
Which of the following ways to pay for college is MOST likely to be based on someone’s financial need?
a. Direct plus loans
b. Grants
c. Scholarships
d. Federal Subsidized Loans
b. grants
What is the order of the financial aid process?
FAFSA, SAR, then financial package
During a period of financial hardship, you can apply for this to pause student loan payments while interest still accrues…
a. Grace Peiod
b. Grants and scholarships
c. FAFSA
d. Forbearance
d. forbearance
What are the 4 types of federal student aid?
Subsidized loans, unsubsidized loans, direct plus, and Perkins federal loans
Which of the formulas below correctly calculates net price?
a. Grants and scholarships + student loans = net price
b. Sticker price - student loans = net price
c. Sticker price - grants and scholarships = net price
d. Sticker price + grants and scholarships = net price
c. Sticker price - grants and scholarships = net price
Who is eligible to receive Direct Subsidized loans?
a. graduate students
b. professional students
c. undergraduate students
d. students enrolled less than half-time
c. undergraduate students
How do you calculate net price?
Sticker price - grants and scholarships= net price
The federal government makes interest payments on __________ while you’re enrolled in school at least half-time, for the first six months after you leave school, and during any period of deferment.
a. work study
b. Subsidized federal loans
c. Unsubsidized federal loans
d. grants
b. Subsidized federal loans
Which repayment option does not accrue interest while your required payments are paused?
a. consolidation
b. deferment
c. refinancing
d. forbearance
b. deferment
What types of money are used in paying for college and in what order should you use them?
a. your money, borrowed money, free money
b. Borrowed money, your money, free money
c. Your money, free money, borrowed money
d. Free money, your money, borrowed money
d. Free money, your money, borrowed money
What is the rule of thumb when it comes to student loans?
Your total student loan debt should not exceed your expected first-year salary after graduating college
A federal student loan available to undergraduate and graduate students; the student is responsible for paying the interest during the time they are in school, which means they must pay that interest while studying or have it rolled into the principal amount of their loan
Which of the following is considered a direct cost of attendance?
a. travel expenses
b. cell phone bill
c. Tuition
d. food and entertainment
c. tuition
What is the order for accepting financial aid?
scholarships and grants, work study, federal student loans, loans from state govt, and private loans
Which of the following is a good strategy to use when it comes to paying for college?
a. Only report your own earnings and savings, not those of your parents, even if you live with them full-time
b. See how much you can borrow in loans before applying for scholarships
c. Spend the money that you earn from your summer job so you can get more financial aid
d. Save your earnings from your summer job so that you can reduce the amount of loans you need to take
d. Save your earnings from your summer job so that you can reduce the amount of loans you need to take
What are the 5 main costs of college?
Tuitition and fees, room and board, books and supplies, personal expenses and transportation
What is the order for accepting financial aid?
scholarships and grants, work study, federal student loans, loans from state govt, and private loans
Typically, when should you first file the FAFSA?
a. After you finish freshman year of high school
b. October or November of your last year of high school
c. After you receive your Student Aid Report
d. Once you are ready to start repaying your student loans
b. October or November of your last year of high school
Briefly explain the difference between direct and indirect costs of attending college and provide an example of each type of cost.
Direct are paid directly to the college such as tuition, housing and meal plans, Indirect are paid to someone other than the college such as transportation and personal expenses
As a result of completing the FAFSA, you get a student aid report that indicates your EFC is $10,000. What does this mean?
a. You can expect to receive $10,000 in grants from the federal government to pay for college
b. You should only apply to schools that cost $10,000 or less
c. You can expect to receive $10,000 in loans from the federal government to pay for college
d. The government expects that your family can contribute about $10,000 to the cost of your education
d. The government expects that your family can contribute about $10,000 to the cost of your education
Which of the following is the default federal student loan repayment plan college graduates are entered into, requires the same minimum payment for the life of the loan, and ensures the borrower will pay the loan in full in ten years?
a. Standard Repayment plan
b. Graduated repayment plan
c. Extended repayment plan
d. income-drive repayment plan
a. Standard Repayment plan
Describe at least three differences between federal and private student loans.
You don’t have to start paying federal loans until you graduate
Federal loan interest rates are typically lower than those of private loans
The interest of some federal loans is paid for by the government (subsidized)
You don’t undergo a credit check to receive federal student loans (except for Direct PLUS loans)
Federal student loans and/or their interest are more likely to be tax deductible
Federal student loans are more likely to offer deferment and/or forbearance
Private student loans might require a cosigner
Private student loans sometimes charge a fee for paying off loans early
Private student loans are less likely to be eligible for forgiveness
Each of the following organizations offers grants to college students EXCEPT…
a. the federal government
b. colleges
c. private companies
d. FAFSA
d. FAFSA
What is a direct subsidized loan?
A student loan that the federal government pays interest on as long as the student is in school at least half-time