Foundations in Personal Finance Test 5 Study Questions

The total estimated student loan debt outstanding (unpaid) is over . . . $1 trillion
True or False: Asking your parents to take out a loan is a good option when it comes to paying for your education. False
Finding a mentor, surrounding yourself with people who have similar goals and ambitions as you and reading books are all . . . Ways to invest in yourself!
True or False: A student loan is an award. False
True or False: Scholarships are only for the highest academic achievers. False
You should visit your college’s financial aid office if . . . Your parents financial situation has changed, you have any problems with the financial aid application process and/or a medical situation has come up.
True or False: Students rarely drop out of college due to financial trouble. False
True or False: If you are cash-flowing your college education, attending an out-of-state school is recommended. False
The average repayment period for a student loan is . . . 10 years
True or False: All high paying careers require a four-year college degree. False
The Fourth Foundation is . . . Pay cash for college
The negative consequences for taking out student loans are . . . 1) not having the freedom to be a stay-at-home parent because of student loan payments, 2) having to delay investing and saving for your future because of student loan payments, 3) not having flexibility in your career options because of student loan payments
The percentage of college students that graduate with student loans is . . . 66%
A wise college plan does not include . . . Finding the most impressive, prestigious college so that you can impress future employers
True or False: Stick to your budget unless something unexpected happens. False
True or False: our culture thinks student loan debt is normal and that it’s an acceptable way to pay for college. True
True or False: A four-year degree is necessary regardless of which career you are entering. False
True or False: The average millionaire reads one nonfiction book a month. True
True or False: When shopping for the best education option, you should narrow down your choice of colleges to 10 schools or less. False
True or False: The best quality colleges are always the most expensive. False
True or False: You must go to a prestigious school in order for employers to recognized your talents and strengths. False
True or False: If you plan to attend a community college for your first two years, you’ll want to work closely with your advisor to make sure that the classes you take will transfer to your four-year school of choice. True
True or False: You must shop for the best price for your education in the same way you comparison shop for any large purchase. True
True or False: You’ll need only to complete the FAFSA once during your college education. False
True or False: The academic and financial choices you make in the next few years will affect the next 40 years of your life. True
A form that is completed annually by current and prospective college students to determine their eligibility for financial aid. FAFSA
A form of financial aid that does not need to be repaid; usually awarded on the basis of academic, athletic or other achievements. Scholarship
A program that allows students to work part time while continuing their studies. Work study
A form of federal or state financial aid that does not need to be repaid; usually given to students who demonstrate financial need. Grant
A two-year government-supported college that offers an associates degree. Community College
Usually a professional trainer serves as the course instructor and uses a combination of hands-on activities and formal classroom training. On-the-job-training
Allows students to learn basic professional skills in two years or less; typically cuts out many of the general courses required by traditional universities. Trade school
These may be free or low-cost; found online, at community colleges, or through government-funded programs. Certifications
A person that starts his or her own business. Entrepreneur
Pay as you go. Cash-flow
How can you get an education debt free after high school? Cash flow your college education if you save now, loan ahead, get good grades, take the ACT/SAT several times, shop around, apply for financial aid (do NOT accept loans), get a part-time job, work a lot and save during summer months, have an emergency fund, live on a zero-based budget, and consider attending a community college close to home for the first two years.
Based on what you have learned, do you feel it is realistic to graduate debt free? Why or why not? Answers will vary. Put some real though into this!!!
What are three reasons you should avoid student loans? Repayment can take 10 years or more, being in debt limits your choices and possibilities, many borrowers fall behind and even default on their student loan payments, many students drop out of college due to mounting debt and financial problems and still have to pay back their loans.
Select a case study out of this chapter and describe the effect student loan debt had on that person’s life. Answers will vary.
What excites you most about life after high school? Answers will vary.
Explain why Dave compares student loan debt to a “monster locked in the closet”. You can only ignore or avoid the monster (debt) for a short time, after college you will have to face the monster.
Explain how academic and financial decisions made today will affect your life for years to come. Answers will vary.

Leave a Reply

Your email address will not be published. Required fields are marked *