Financial Aid Questions

What is My Peterson's?

Testing Your Financial Aid Literacy

1. When should I apply for need-based financial aid?

(A)		At the same time I apply for admission
(B)		When I am admitted to a college (or colleges)
(C)		As soon as possible after January 1st of the year in which I will start college
(D)		As soon as I have accepted admission to the school I will be attending and sent in my deposit

2. How often must I file for federal aid?

(A)		Once, before the beginning of my freshman year
(B)		Once a year for every year during which I wish to be considered for aid
(C)		Once prior to entering college, and again if my, or my parents', financial circumstances change
(D)		Once prior to entering college and once prior to my junior year

3. For financial aid purposes, what items are included in the Cost of Attendance?

(A)		Tuition and fees
(B)		Tuition and fees, room and board
(C)		Tuition and fees, room and board, books/computer and supplies
(D)		Tuition and fees, room and board, books and supplies, travel and personal expenses

4. What is the precise definition of "financial need"?

(A)		Cost of Attendance minus Financial Aid
(B)		Cost of Attendance minus Outside Scholarships
(C)		Cost of Attendance minus Expected Family Contribution (EFC)
(D)		Cost of Attendance minus Expected Family Contribution (EFC) minus on-campus earnings

5. How is financial need calculated for federal need-based aid?

(A)		From copies of you and your parents' IRS 1040 forms as forwarded to your college by the Internal Revenue Service
(B)		By an analysis of the information provided on your Free Application for Federal Student Aid (FAFSA) according to a formula mandated by federal statute
(C)		By filing your college or university's institutional application for financial aid and having the data on it reviewed by a college aid officer
(D)		By having an aid officer drive by your house to see how well off you look

6. A student is considered financially independent from his/her parents for financial aid purposes under what circumstances?

(A)		If neither parent has claimed the student for income tax purposes for the two years prior to filing the FAFSA
(B)		If the student has not resided in the home of either parent for two years prior to filing
(C)		If the student falls into one (or more) of six narrowly defined federally mandated categories including having a dependent, being a veteran, being married, being at least 24 years of age, being an orphan or ward of the court, or having obtained a bachelor's degree
(D)		It's impossible. Don't even think about it

7. In situations where parents are divorced or separated, which parent's income(s) must be reported on the FAFSA?

(A)		The parent with the greater income
(B)		The income of the parent claiming the student on his/her income tax form
(C)		The income of the parent with whom the student lived for the majority of the previous twelve months. (Usually called the "custodial parent")
(D)		The parent who will be contributing more toward the student's college education

8. What does the term "package" mean as it applies to financial aid?

(A)		It is a term used to refer to the collection of awards from federal, state, or institutional funds which, together, make up a student's financial aid award
(B)		It is a term used to describe the necessary application forms, statements, income tax forms, and other documentation students and parents must submit in the course of applying for aid
(C)		It is a term used to refer to the combination of admissions letter, financial aid offer, acknowledgement forms, and other information mailed to a student at the time of admission
(D)		It's just another example of annoying financial aid jargon. Don't worry about it

9. What is a SAR?

(A)		A Supplemental Asset Request
(B)		A Student Aid Report
(C)		A Scholarship Award Report
(D)		An early twentieth-century Russian monarch

10. What is the maximum Pell Grant for the 2007-08 (July 1, 2007 to June 30, 2008) academic year?

(A)		$1,500
(B)		$2,500
(C)		$3,750
(D)		$4,050

11. If my son/daughter is determined to be ineligible for need-based financial aid, what other options are available to me?

(A)		Unsubsidized Federal Stafford Loans and Federal Parent PLUS Loans (Parents' Loan for Undergraduate Students)
(B)		Various tuition payment plans
(C)		Education loans from private lenders
(D)		All of the above and possibly more, including on-campus employment

12. What is an "outside" scholarship?

(A)		An award made by the school on the basis of merit as opposed to financial need
(B)		An award given by the student's academic department for work done on specific academic or research project
(C)		An award given by a source unconnected with the college or university, such as a PTA, civic organization, or business located in the student's community
(D)		A term used by aid officers to refer to illicit monies slipped to the student under the table

13. What is the interest rate on a Federal Stafford Loan borrowed for the 2006-07 (July 1, 2006 to June 30, 2007) academic year?

(A)		2.77%
(B)		4.7%
(C)		6.87%
(D)		It varies with changes to the federal prime interest rate as set by the Federal Reserve Board

14. When must a student begin to repay an Unsubsidized Federal Stafford Loan?

(A)		Ninety days after borrowing
(B)		Six months after graduation from school
(C)		The interest is due thirty days after the loan is disbursed, but the principal is not due until six months after the student ceases to be less than a half-time student. Also, the in-school interest can be added to the principal and be repaid with it
(D)		As soon as the student is lucky enough to find a job

15. What are the income criteria for receiving a Federal Parent PLUS Loan?

(A)		An Adjusted Gross Income of under $50,000 annually
(B)		An Adjusted Gross Income of under $100,000 annually
(C)		There are none
(D)		There is no fixed income requirement, but the borrower must successfully complete a credit check or have a credit worthy co-signer for the loan

16. What is the total undergraduate borrowing limit under the Subsidized Stafford Loan Program for dependent students?

(A)		$16,000
(B)		$17,125
(C)		$23,000
(D)		There is no fixed limit. The amount depends on the level of demonstrated financial need

17. How does a student receive payment for work done under the Federal Work-Study program?

(A)		The money is advanced to the student at the beginning of the academic semester so he/she can pay his/her term bill
(B)		The money is paid in the form of a biweekly payroll check, much like any other job or it may be deducted from the term bill
(C)		The money is held to ensure that all work for the semester or other academic period (trimester, quarter, etc.) is completed
(D)		After a thirty-day probationary period, the money is paid monthly via payroll check

18. What credit load must a student carry in order to qualify for federal financial aid?

(A)		It depends on the federal program in question
(B)		All students receiving federal aid must be full-time
(C)		All students receiving federal aid must be at least half-time
(D)		It is determined by the policy of the college or university

19. Must a student be a citizen of the United States to qualify for federal financial aid?

(A)		Yes. You must be a citizen of the United States to qualify for federal aid
(B)		No. Permanent residents are also eligible
(C)		No. Any person in this country on a legitimate student visa is eligible
(D)		No. Anyone residing in this country and attending an accredited college or university is eligible

20. What are the academic eligibility requirements necessary to continue receiving federal and most state need-based aid?

(A)		Maintaining a certain minimum GPA
(B)		Earning a certain number of credits or clock hours toward one's degree objective per period of enrollment
(C)		Meeting both a qualitative standard (GPA) and a quantitative standard, satisfactory academic progress toward one's degree
(D)		There are no federal regulations which speak on this issue

21. What are the new maximum Stafford Loan amounts for freshman and sophomore students effective July 1, 2007?

(A)		Freshman $2,625, Sophomore $3,500
(B)		Freshman $3,000, Sophomore $4,000
(C)		Freshman $3,250, Sophomore $4,250
(D)		Freshman $3,500, Sophomore $4,500

According to a recent article in the NY Times, Assets in 529 college savings plans have grown to $75.3 billion, up from $8.5 billion in 2001.

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