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EVERFI Pathways: Financing Higher Education is an incredibly beneficial resource for educating students about the financial commitments of post-secondary education. Students will become equipped with knowledge on various topics such as understanding grant and loan options, filing FAFSA applications correctly, taking out student loans responsibly, and budgeting to ensure successful debt repayment.
Understanding Your Higher Education’s ROI Answers
Choosing the higher education institution with the cheapest sticker price might be a bad idea because _____.
more expensive schools may be cheaper once the net cost has been determined.
Why would researching the average earnings by major and by career be useful to you as you choose an institute for higher education?
It can help you calculate the return on investment.
If your earning potential is higher than the cost of your higher education, you will have a _____.
positive return on investment for higher education
The full cost of attendance to an institute of higher education, including tuition, room and board, books and other costs is known as _____.
the sticker price
Which is an example of why higher education typically has a positive return on investment (ROI)?
The jobs you get with higher education will earn more money than jobs without a degree or certificate.
A _____ can help you estimate how much money you might get in scholarships and grants at a given institution of higher education
net price calculator
Buying used textbooks, cooking your own meals and biking instead of driving can all reduce the _____.
full costs of higher education
Taking more than four years to graduate will increase costs and may impact a return on investment. What could you check to see how long most students take to finish at an institute of higher education?
graduation rate
Jeremiah works at a pet store. He went to a community college but didn’t finish. He has some student loans now. What kind of return on investment (ROI) does Jeremiah demonstrate?
Negative ROI
Are net costs or sticker prices lower for higher education and why?
Net costs are lower since they include all scholarships, grants and special program financing.
Understanding Financial Aid Answers
When paying for higher education, money that you borrow and must pay back later comes from _____.
loans
Which financial aid program may require you to serve in the military after earning a degree?
Reserve Officer Training Corps (ROTC)
Why is it important to consider loans last when paying for higher education?
Loans need to be paid back but scholarships and grants are free money.
Which person at your school would most likely have up-to-date information about scholarship opportunities?
School counselors
Merit scholarships can be awarded for high GPAs or test scores, honors recognition, leadership roles and _____.
community service
The FAFSA asks you to list the higher education institutions you will apply to because the federal government will _____.
send your student aid report directly to them
When paying for higher education, scholarships and grants can be considered _____.
free money
What is the purpose of the FAFSA?
To access need-based federal aid, including federal loans
The FAFSA is unlike other financial aid applications because ____.
each state has its own deadline and you need to apply every year
Why is it necessary to include your family’s income and tax information on a FAFSA application?
They are used to calculate your Expected Family Contribution (EFC) which determines your need-based aid.
Student Loan Basics Answers
Who is most likely to have general information about financial aid at many different institutes of higher education?
High school counselor
Subsidized loans are different from other types of loans because they _____.
are based on financial needs
Federal loans are from _____.
the government
What is an origination fee on a loan?
A fee that is charged by a lender to make up for the cost that they spend giving you a loan.
How often do you need to apply for a federal student loan?
Every year
Who would most likely be a cosigner on some student loans?
a parent or guardian
Which type of loan has a higher borrowing limit, a subsidized or unsubsidized loan?
Unsubsidized loan
What happens if you don’t pay back a cosigned loan on time?
It will impact you credit score and the credit score of the parents or guardian who cosigned with you.
Which resource would not have reliable information about student loans?
Teller at a financial institution
Which statement best describes how private student loans are different from federal student loans?
Private loans can have fixed or variable interest rate and there are many options for paying them back.
Budgeting for Your Loans Answers
What does Expected Family Contribution (EFC) mean?
How much the federal government expects your family will be able to contribute per year toward your school expenses.
The _____ is the additional costs you pay each year in order to borrow money in loans, including both interest and fees.
annual percentage rate (APR)
How is cost of attendance (COA) determined at an institute of higher education?
It is an estimate of tuition, fees, room and board, books, supplies and other expenses.
If you want to pay less interest over the life of your loan, you should make a _____ monthly payment.
high
Along with the amount of financial aid, which is the most important to pay attention to when trying to determine financial aid costs in relation to your personal budget?
The actual cost of attendance
What is an origination fee on a loan?
A percentage of the loan that is charged to cover the cost of giving the loan.
Financial aid letters from institutes of higher education show your yearly aid and costs for attending. This means that you will need to_____.
reapply for aid every year
When determining how much money to borrow in loans to pay for your higher education, which of the following items should not be considered?
When determining how much money to borrow in loans to pay for your higher education, focus first on how much you will still need after financial aid for each year you are in school and how much your family can contribute. Pay attention to interest rates after you know how much you need to borrow.
Which type of interest can change over the life of a loan?
Variable interest
What’s the best advice to give to a student who says: “It’s easy to determine which school is more affordable; just look at how much financial aid they give you!”
Not true! You have to subtract financial aid offers from cost of attendance to determine true costs.
Repaying Loans Responsibly Answers
When creating a budget to repay your student loans, you should plan to pay back _____.
interest and principal
Which of the following is not true if you default on a student loan?
You will have your degree taken away.
Which is an example of a graduated repayment plan for student loans?
Payments start lower and increase every 2 years.
What happens when you refinance a student loan?
A lender pays off your existing loan and offers a new loan with a different interest rate, payment schedule and terms.
Having a high debt-to-income ratio or defaulting on your loan can bring down your credit score. A low credit score on your credit report can _____.
make it much harder to borrow money in the future
Taking care of your _____ first is a good budgeting strategy that includes covering your loan payments.
needs
High student loan payments can impact all of the following life decisions except _____.
being able to afford food
If Emmett wants to pay off his student loan by making monthly payments for 10 years, what type of repayment plan is best for him?
Standard repayment plan
One consequence for defaulting on a loan is having your transcript withheld. How could this affect you as you graduate?
You may not get a job that requires a transcript.
Opportunities to reduce or wipe away part of a loan amount based on your public service or by being a teacher in a low-income public school are called_____.
forgiveness programs
Sources
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