NGPF Paying of College Unit Test

Which of the following statements is TRUE about the value of a college education?

• A high school graduate can expect to earn about the same as a college graduate.

• A college graduate can expect to earn, on average, about $40,000 more than a high school graduate over a career.

• 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.

• 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.

• Don't sign up, unless your parent says it's OK to use their credit card for the payments.

• Sign up, because at $40 per month, it will be a bargain if they win you thousands in scholarships.

• 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.

Rank these ways of paying for college from MOST attractive to LEAST attractive.

• Federal Loans

• Most Attractive

  1st

• Private Loans

• 3rd

• Work Study

• 2nd

• Grants & Scholarships

• Worst

  4th

Johnny is trying to calculate the NET PRICE of a school that he just got a financial aid offer from. Which of the following formulas should he use to calculate the net price?

• Sticker Price - (Savings + Grants)

• Sticker Price - (Grants + Scholarships)

• Sticker Price - (Grants + Scholarships + Work-Study)

• Sticker Price - (Grants + Scholarships + Loans)

Janelle'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.

• State U has a lower net price than Greenlawn College.

• The sticker prices of both schools are impacted by a family's total annual income.

• If making a decision strictly based on cost, Janelle's best option is State U.

Which loan type am I? I have limits on the amount that you can borrow based on your year in college. 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.

• Unsubsidized Federal Student Loan

• Private Student Loan

• Subsidized Federal Student Loan

• Institutional Student Loan

1. Alicia 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.

• Accept federal unsubsidized student loans first. Then, if she has any remaining balances to cover, accept federal subsidized student loans.

• Start researching repayment options and plans only when she is about to graduate.

• Make as many interest payments as possible while she is still in school to minimize her total debt after graduation.

1. When filing the FAFSA online, you need...

Check ALL that apply:

• Username and password for FSA ID

• Your Social Security Number (or Alien Registration Card if not a US citizen)

• Proof of Employment

• Bank and/or investment statements (if applicable)

1. Your friends are having a debate about rules of thumbs to use when it comes to student loan debt. Who is CORRECT?

• Miguel says, "You should borrow as much money as you can through private student loans, and then take out federal student loans."

• Dani says, "You should avoid student loans no matter what, even if that means you have to work long hours and can't take a full course load."

• Jason says, "You should generally limit your borrowing to what you expect to earn as a starting salary when you graduate from college, and avoid private student loans."

• Aisha says, "You should borrow all of the financial aid your college offers you in your financial aid offer, even if you don't need it all."

When Emmanuel receives his Student Aid Report, it lists an Expected Family Contribution (EFC) of $8000 for the year. His family had only budgeted to give him $2000, so they are $6000 short. Which of the following is/are option(s) that Emmanuel and his family can take?

Check ALL that apply:

• Emmanuel can call the financial aid office, explain the situation, and ask them to review his materials again.

• His parents can take out a federal Direct PLUS Loan for the other $6000.

• Emmanuel can apply for scholarships or grants from other organizations besides the college.

• His parents can take out a federal student loan in their name for the other $6,000.