#1
Which of the following is a potential financial benefit of obtaining a higher education degree?
Increase in earning potential
ExplanationHigher education can lead to higher salaries and career advancement.
#2
What is a common type of financial aid available to students pursuing higher education?
Scholarships
ExplanationScholarships provide financial assistance based on academic or other achievements.
#3
What is the 'sticker price' of a college?
The advertised cost before financial aid
ExplanationSticker price refers to the published cost of attendance before any discounts or aid.
#4
What is a common strategy for reducing the cost of textbooks in college?
Renting textbooks
ExplanationRenting textbooks instead of purchasing them outright can save students money.
#5
Which of the following is NOT a potential source of funding for graduate students?
Parental allowance
ExplanationParental allowance is not typically considered a source of funding for graduate studies.
#6
Which of the following is a factor to consider when budgeting for higher education?
Tuition fees
ExplanationTuition fees are a significant expense when planning for higher education.
#7
What is a common strategy for managing student loan debt?
Consolidation
ExplanationConsolidating loans combines multiple debts into one, potentially lowering interest rates.
#8
What is the FAFSA and why is it important for college students?
It's a federal form for financial aid eligibility
ExplanationFAFSA determines eligibility for federal grants, loans, and work-study programs.
#9
How does the cost of attending a public university typically compare to a private university?
Private universities are usually more expensive
ExplanationPrivate universities often have higher tuition fees compared to public institutions.
#10
Which of the following is NOT a common source of funding for graduate students?
Parental allowance
ExplanationParental allowance is not typically considered a source of funding for graduate studies.
#11
What is the average student loan debt for graduates in the United States?
Over $40,000
ExplanationThe average student loan debt for graduates in the US exceeds $40,000.
#12
Which of the following is a potential consequence of defaulting on student loans?
Wage garnishment
ExplanationDefaulting on student loans may lead to wage garnishment, where lenders can deduct payments directly from paychecks.
#13
Which of the following statements about 529 plans is true?
They are college savings plans
Explanation529 plans offer tax-advantaged savings for future educational expenses.
#14
What is the difference between a subsidized and unsubsidized student loan?
Unsubsidized loans accrue interest while in school
ExplanationInterest on unsubsidized loans starts accumulating from disbursement, unlike subsidized loans.
#15
What is the Lifetime Learning Credit?
A tax credit for college tuition
ExplanationThe Lifetime Learning Credit offers tax benefits for eligible education expenses.
#16
What is the 70-20-10 rule in budgeting for higher education?
70% of income for tuition, 20% for books, 10% for living expenses
ExplanationThe 70-20-10 rule suggests allocating income to tuition, books, and living expenses in these proportions.
#17
What is the difference between a traditional IRA and a Roth IRA?
Traditional IRA contributions are tax-deductible, Roth IRA contributions are not
ExplanationContributions to a Traditional IRA may be tax-deductible, while contributions to a Roth IRA are made with after-tax income.
#18
What is the difference between a 401(k) and a 529 plan?
401(k) is for retirement savings, 529 plan is for college savings
Explanation401(k) plans are for retirement savings, while 529 plans are specifically designed for educational expenses.
#19
What is the difference between a college savings plan and a prepaid tuition plan?
There is no difference, they are the same thing
ExplanationCollege savings plans and prepaid tuition plans both help save for college expenses, but they operate differently.