AnswersEconomics and Personal FinanceUnderstanding College Savings

Understanding College Savings — Quiz Answers

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1
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Look at the table and identify the method of financial aid that requires repayment. Select the correct answer in each row.

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2
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Which methods of paying for college do not require repayment? Choose four correct answers.

A
college savings
B
work-study
C
scholarships
D
grants
E
student loans
3

Kevin is in 8th grade and he wants to attend college. He claims he needs to research how much college will cost for his chosen degree and fill out the FAFSA before he can prepare and save for college. Which statement about his claim is correct?

A
Kevin is incorrect. It is too late to save for college. His parents should have started a college savings account when he entered kindergarten.
B
Kevin is correct. By filling out the FAFSA and sending it in, he will not have to pay anything because grants and scholarships will cover the costs.
C
Kevin is incorrect. It is never too early to start saving for college. Even if he earns scholarships, he could use the money for other expenses.
D
Kevin is correct. He needs to know how much of his college expenses will be covered so he knows how much to save.
4

Roderick is in 11th grade and wants to attend college to become a marine biologist. He knows he will need funds. What should he do to begin the process of planning for paying for his education?

A
He could fill out a FAFSA form to determine what financial aid he would qualify for.
B
He could quit the sports and clubs he is involved in to earn more money at an after-school job.
C
He could ask his friends to donate to an account for his college fees.
D
He could graduate from high school and then work until he has enough money to pay for college.
5

How are loans and grants different?

A
By filling out the FAFSA, students can find out if they qualify for grants, but not loans.
B
By filling out the FAFSA, students can find out if they qualify for loans, but not grants.
C
Grants must be repaid, while loans are like gifts.
D
Loans must be repaid, while grants are like gifts.
6

John is about to enter a college in Texas. The total tuition fee for one year is $⁢9,950 He received some financial aid through scholarships, grants, job income, and loans. Scholarship: $⁢1,000 Grant: $⁢1,500 Work study: $⁢2,000 Student college loan: $⁢1,000 After accounting for all the financial aid, how much will John have to pay for his first year of college? Enter your answer in the box.

Answer:

4450

7

Martha will be entering high school in a couple of years. Which steps should she take to ensure she has money to pay for college? Choose four correct answers.

A
She should ask all her friends and neighbors to contribute to her college savings account so it will grow faster.
B
She should fill out the FAFSA immediately so she does not miss grants or scholarships she qualifies for.
C
She should start or add to a college savings account so it can grow with deposits and earned interest.
D
She should ask her parents if they have a college savings account set up for her.
E
She should get involved in extracurricular activities like clubs and sports so she can discover what she enjoys and qualify for scholarships.
F
She should work to maintain high grades throughout school so she can qualify for scholarships.
8

Which form must be filled out and submitted to determine the types and amount of financial aid available to a student?

A
voter registration form
B
1080EZ
C
HIPAA notice
D
FAFSA
9

Desmond told his two friends, Marley and Brianna, that he was awarded a $10,000 grant for college if he becomes a math or science teacher. Desmond wants to teach physics. Marley told him he should take the grant. Brianna told him not to take the grant. Which statement about their advice is true?

A
Marley is correct because he can take the grant and then study whatever he chooses without paying it back if he changes his mind about his career.
B
Marley is correct because a grant is like a gift and he can still get scholarships or loans to pay for the rest of his expenses.
C
Brianna is correct because he cannot get scholarships if he takes the grant and scholarships would pay more of his education costs.
D
Brianna is correct because grants are like loans and must be paid back. He should wait and see what scholarships and work-study programs he qualifies for.
10

If he pays the balance with a student loan, how much will he need to borrow for his first year?

A
$6,000
B
$10,900
C
$14,200
D
$4,400

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