Deck 12: Managing Your Money

Question 1

The first step of developing a budget is

A) finding part-time or full-time employment.
B) assessing your overall financial situation.
C) determining whether you qualify for financial aid.
D) applying for a student loan or grant.

Answer 1

B

Question 2

Private loans come from

A) the state government.
B) the federal government.
C) a college or university.
D) a bank or credit union.

Answer 2

D

Question 3

What does it mean if a loan has a variable interest rate?

A) The rate will steadily rise over the life of the loan.
B) The rate will steadily fall over the life of the loan.
C) The rate can rise and fall over the life of the loan.
D) The rate will remain constant for the life of the loan.

Answer 3

C

Question 4

Which statement about federal loans is correct?

A) They have a fixed interest rate that is usually lower than private loan interest rates.
B) They have a fixed interest rate that is usually higher than private loan interest rates.
C) They have a variable interest rate that is usually lower than private loan interest rates.
D) They have a variable interest rate that is usually higher than private loan interest rates.

Question 5

To qualify for a direct subsidized loan from the federal government, a student must demonstrate

A) financial need.
B) academic achievement.
C) both financial need and academic achievement.
D) neither financial need nor academic achievement.

Question 6

Which type of federal loan is taken out by a student's parents rather than the student?

A) direct subsidized
B) direct unsubsidized
C) PLUS
D) Federal Perkins

Question 7

A _____ is reserved specifically for students with exceptional financial need.

A) PLUS loan
B) Federal Perkins loan
C) direct subsidized loan
D) direct unsubsidized loan

Question 8

Emilia is starting her first term at a four-year college in August. To help pay for her education, she took out a federal direct unsubsidized loan. Assuming she maintains her status as a full-time student over the next four years, when will Emilia have to start repaying the loan?

A) as soon as school starts
B) at the beginning of her third year of college
C) at the beginning of her final year of college
D) after she graduates

Question 9

When Jim was accepted at a private university, he quickly realized that he wouldn't be able to afford the tuition on his own. With the help of a financial advisor, he was able to obtain a direct subsidized loan from the federal government. The interest on Jim's loan will begin to accrue while he is in college. Who is responsible for paying the interest on Jim's direct subsidized loan while he attends school?

A) Jim
B) Jim's parents
C) the federal government
D) the state government

Question 10

A _____ program provides part-time employment opportunities to help cover the cost of college.

A) scholarship
B) stipend
C) grant
D) work-study

Question 11

A _____ or "award" is a one-time payment to help offset the cost of attending college.

A) stipend
B) grant
C) student loan
D) scholarship

Question 12

What is the FAFSA?

A) a private scholarship program
B) a standard part-time job application
C) a free federal loan application
D) a scholarship awarded by a college or university

Question 13

The CCS Profile is used to

A) determine whether you qualify for federal aid.
B) help colleges award institutional aid.
C) create a personalized budget.
D) apply for a private bank loan.

Question 14

Tamayo applied for financial aid a few months before starting her first term at college. She qualified for a grant and was able to get in a work-study program. If she hadn't received financial aid, she wouldn't have been able to afford college. If Tamayo intends to stay in college for the next four years, when will she need to reapply for financial aid?

A) next year
B) in two years
C) never, unless she transfers to a different school
D) never under any circumstances

Question 15

When choosing a credit card, you should

A) request that interest start accruing immediately.
B) make payments only if you have extra money to do so.
C) treat it like "free money" for purchasing whatever you want.
D) select a card with no annual fee.

Question 16

What happens if you can't pay off your credit card in full each month?

A) Your account will be frozen.
B) You will have to pay interest on the balance.
C) The outstanding balance will be added to your tuition bill.
D) Your credit limit will be increased.

Question 17

Santino was excited to get his first credit card because he had heard that it's important to develop a good credit history. At first he just used it to buy his textbooks, but before long Santino was using his card for everything. He treated friends to dinner, bought concert tickets, and even used it for groceries. When his first bill came, he barely had enough to make the minimum payment. With all of his spending, his minimum monthly payment has gone up, and he's had to borrow money from his parents. What should Santino do?

A) apply for another credit card and use it to make payments on his original card
B) contact the credit card company and ask them to increase his credit limit
C) stop using his credit card and focus on paying off his balance
D) use his credit card to get a cash advance, and use that money to make payments

Question 18

What type of card draws money directly from your checking account?

A) debit card
B) credit card
C) prepaid credit card
D) student ID card

Question 19

Ellen was on stable financial ground when the term began. She had some financial aid, which helped cover the cost of school, and her part-time job earned her enough money to cover her rent and everyday expenses. Within a few months, things took a turn for the worse. There was a fire in her building, and she was forced to move to a new apartment that was more expensive. Her hours were also cut at her job, leaving her with a smaller paycheck. She started using her credit card to bridge the gap, but now she is accumulating significant debt. What should Ellen do?

A) withdraw from school at the end of the term and get a full-time job
B) register for fewer classes next term so she can be considered a part-time student
C) speak to a financial aid officer as soon as possible
D) continue living off her credit card and try to find a second job

Question 20

_____ will negatively affect your credit history.

A) Using a debit card for all of your purchases
B) Paying off your credit cards in full each month
C) Using a prepaid card for all of your purchases
D) Making late payments on your credit card

Question 21

Managing your money is one of the most important life skills you can develop.

Question 22

You may need an established credit history to obtain a private loan.

Question 23

The higher the interest rate on a college loan, the faster you will be able to pay it off.

Question 24

A federal loan can help you develop a good credit history if you manage your payments well.

Question 25

Grant money must be repaid.

Question 26

Grants from colleges are usually based on financial need.

Question 27

Stipends can reduce the hours you might otherwise need to work to make ends meet.

Question 28

Students must pay a fee to submit a CSS Profile regardless of their financial status.

Question 29

Credit cards often charge fees for missed or late payments.

Question 30

If you bounce a check, your credit history will be negatively affected.

Question 31

List three ways to keep track of your expenses in college.

Question 32

Identify three types of aid that might be part of a student's financial aid package.

Question 33

List four examples of characteristics and/or achievements that might qualify a student for a particular type of scholarship.

Question 34

Give three examples of questions you should ask to ensure that you understand your financial aid.

Question 35

Why is it important to use credit cards wisely?

Question 36

Describe the process of preparing a budget. Use your own financial situation to illustrate each step (you do not have to include actual figures-instead, identify sources of income, specific expenses, etc.).

Question 37

In your opinion, what are the two best financial aid options? What are the two least attractive options? Describe each option you select and explain why you do or don't prefer them. Include examples to support your arguments.

Question 38

Prepare an instructional essay that explains the basic steps of the financial aid application process.

Question 39

Imagine that you are interested in applying for a credit card. Describe the features you would look for in a card, as well as terms or features that would dissuade you from selecting a particular card. Include examples in your response.

Question 40

Explain what a credit history is and then discuss at least three strategies that would help college students establish a good credit history. Include examples in your response.