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Paying for College
FINAL
| Question | Answer |
|---|---|
| Order that you should accept financial aid in | Grants/Scholarships, Work-study, Federal loans, Private loans |
| What is the FAFSA? | To apply for federal student aid, such as federal grants, work-study, and loans, you need to complete the FAFSA. |
| Subsidized federal loan | Loans for undergraduate students. The federal government makes the interest payments while you are in college, and you make the interest payments on me after you graduate. |
| Net Price formula | Cost of Attendance minus grants and scholarships = net price |
| Rule of thumb with student loan debt | You should generally limit your borrowing to what you expect to earn as a starting salary when you leave college |
| Direct PLUS Loan | Direct PLUS Loans are federal loans that graduate or professional students and parents can use to help pay for college . |
| When is the FAFSA available? | October |
| Student Aid Index | The Student Aid Index (SAI) is an eligibility index number that a college uses to determine how much federal student aid the student would receive if the student attended the school. The lower the SAI, the more financial aid you might receive. |
| Unsubsidized Federal Loan | Both undergraduate and graduate students can use unsubsidized federal loans. You pay the interest during the entire loan. |
| Grants | Free money awarded to students in college based on their financial need. |
| FAFSA Submission Summary | After you submit the FAFSA, you’ll get a summary, an electronic or paper document that summarizes the information you reported on your FAFSA form including your SAI and your eligibility of federal aid. (1-3 business days later) |
| Scholarships | A scholarship is financial support awarded to a student, based on academic achievement or other criteria that may include financial need, for the purpose of schooling. |
| Federal Student Loans are BETTER than private loans... | Federal student loans have lower interest rates, are easier to get than private loans, which may require a co-signer |
| Deferment | The student may pause repayment of a student loan for a designated period. Interest is not accruing. |
| Forbearance | The student may pause repayment of a student loan for a designated period. Interest will accrue during this time. |
| Standard Repayment Plan | By default, many grads are placed into this plan. You will pay a fixed amount of money each month for 10 years. |
| How often do you have to submit the FAFSA? | Every year that you are in college. |
| Are federal student loans fixed or variable? | Fixed. Private Loans could be Variable. |
| Graduated Repayment Plan | Monthly payments are lower initially and increase every two years with you still paying off the loan in 10 years total. |
| Income Driven Repayment Plan | You will pay a certain percentage of your income towards your loan each month and the total time it will take to pay off the loan will fall between 20-25 years. Your loan balance will be forgiven after making on-time payments for 20-25 years. |
| Federal Student Loan Grace Period | After you graduate, leave school, or drop below half-time enrollment, you have a six-month grace period before you must begin making payments. This grace period gives you time to get financially settled and to select your repayment plan. |
| What types of money are used in paying for college and what is the order to accept them in? | Free money, your money, borrowed money |
| What does FAFSA stand for? | Free Application for Federal Student Aid |
| What does FAFSA stand for? | FREE |
| Collateral | Something valuable that the lender can take as payment if you can't or don't repay your secured loan |
| Minimum Payment | The smallest amount of a credit card bill that a credit card holder must pay during a billing cycle to remain in good standing with the lender |
| The details of any loan will include the following 3 components: | The principal, the interest rate, and the loan term |
| Having a good credit score, making a larger down payment, and finding a cosigner with good credit are all ways to… | Decrease your interest rate |
| Credit Score factors | Payment history 35% Amounts Owed 30% Length of Credit History 15% New Credit 10% Credit Mix 10% |
| Credit Score | A three-digit number that predicts your creditworthiness, based on your credit report information. Lenders use this number to assess the likelihood that you will repay borrowed money on time. |
| Secured Credit Card - The limit? | The amount you deposit becomes your credit limit. |
| What is the credit score range from lowest to highest possible score? | 300-850 |
| Why diversify your investing portfolio? | To reduce or minimize risk. |
| Bond | A bond is an investment in which an investor lends money to a corporation or government with the expectation that it will be paid back with interest. |
| Stock | A share of the value of a company, which can be bought, sold, or traded as an investment and which gives the investor small partial ownership of the company |
| How to make money with stocks? | Receive dividends and/or they sell the stock at a higher price than what they bought it for |
| Traditional 401(k) Plan | A 401(k) is an employer-sponsored retirement savings plan that allows employees to contribute a portion of their salary to an investment account, with the potential for employer matching contributions and tax advantages. |
| Individual Retirement Account (IRA) | An IRA is a tax-advantaged investing tool set up by individuals for retirement savings |
| Net Pay Formula | Gross Pay - Deductions = Net Pay |
| W-2 | A form that an employer must send to an employee by Jan. 31 which reports the employee's annual wages and taxes withheld from their paycheck |
| W-4 | A form completed by an employee to indicate his or her tax situation (exemptions, marital status, etc.) to the employer, who then withholds the corresponding amount of taxes from each paycheck. You fill this out on the first day of your job. |
| Standard Deduction for 2025? (What is someone required to make in order to pay federal taxes and be legally required to file a tax return) | $15,750 |
| The due date for filing your federal income tax return or to request an extension? | April 15 |
| Tax Deadline for someone who requested an extension? | October 15 |
| Gross Pay | Gross pay is the total amount of an employee's earnings before any deductions for taxes |
| Net Pay | Net pay, also called "take-home pay," is the money an employee actually receives after all deductions. |
| What is a general rule of thumb on how much you should save? | 20% of your income |
| What do they recommend that you build up in your emergency fund? | 3-6 months of expenses |
| Traditional Savings Account | A place to hold money that you don't want to spend on a regular basis. This money will earn interest. |
| Checking Accounts | This account offers a convenient way to pay bills and access cash from an ATM. This account automatically deducts money from your account when you use your debit card |
| Overdraft Protection | Overdraft protection ensures transactions still process even if there isn't enough money in your bank account. You will be charged a fee for each transaction. |
| Direct Deposit | Your employer sending your paycheck electronically to your bank account. |
Created by:
LindsayMiller344