Financing Higher Education Everfi Module 6 Answers- FAFSA Questions

Financing higher education can be a daunting task for many students and their families. With the rising costs of tuition, books, and living expenses, the financial burden can seem overwhelming. However, resources like the Free Application for Federal Student Aid (FAFSA) provide a vital lifeline. FAFSA is a comprehensive tool that evaluates a student’s financial need and determines their eligibility for various types of federal aid, including grants, loans, and work-study programs.

This aid can significantly reduce the financial strain of higher education, making it more accessible and manageable. By filling out the FAFSA, students open the door to numerous opportunities for funding their education. It’s not just about loans; FAFSA also unlocks potential grants and scholarships, which do not require repayment. Understanding and utilizing the FAFSA is crucial for students who wish to pursue higher education without the heavy burden of financial stress.

For more, Everfi Question Answers Module 6:

• Earning a Degree Can Be Expensive But Which Example Shows Why It Might Be Worth It?
• What Type Of Federal Funding Is Free Money But Is Based On Financial Need Only

For Module 4, Visit:

• Everfi Financial Literacy Answers
• Everfi Credit and Debt Answers
• EverFi Module 4 Answers – EverFi Consumer Skills Test

Everfi Financial Literacy Answers – Financing Higher Education Everfi

Stafford Loan

Definition: Common Federal Student Loan.

Explanation: A type of federal loan, often based on financial need, with specific borrowing limits.

Mutual Fund

Definition: Diversified Investment Pool

Explanation: An investment fund that pools money from various investors to purchase a variety of securities like stocks and bonds.

IRA

Definition: Individual Retirement Account

Explanation: A personal savings plan offering tax advantages for setting aside money for retirement.

Risk

Definition: Potential for Investment Loss

Explanation: The likelihood of losing money in an investment due to various factors like market volatility.

Stock Exchange

Definition: Marketplace for Trading Stocks

Explanation: A structured market where investors can buy and sell shares of publicly traded companies.

Stock

Definition: Equity in a Company

Explanation: A type of security that signifies ownership in a corporation and represents a claim on part of the corporation’s assets and earnings.

Scholarships

Definition: Educational Financial Aid

Explanation: Grants or payments made to support a student’s education, awarded on the basis of academic or other achievements.

Earning Potential

Definition: Future Income Capacity

Explanation: The amount of money a person can expect to earn over time, often influenced by education and skill level.

Private Student Loans

Definition: Non-Government Educational Loans

Explanation: Loans offered by private lenders with terms set by the lender, typically having higher interest rates.

403(b)

Definition: Non-Profit Employee Retirement Plan

Explanation: A retirement plan similar to a 401(k) but for employees of non-profit organizations and schools.

Grants

Definition: Non-Repayable Educational Funds

Explanation: Sums of money given for educational purposes, not requiring repayment, often based on financial need.

401(k)

Definition: Employer-Sponsored Retirement Plan

Explanation: A retirement savings plan sponsored by an employer allowing employees to save and invest a piece of their paycheck before taxes.

Subsidized Loans

Definition: Interest-Free While Studying Loans

Explanation: Federal student loans where the government pays the interest while the student is in school or during grace periods.

FAFSA

Definition: Federal Student Aid Application

Explanation: The form used by college students to apply for financial aid such as grants, loans, and work-study.

Grace Period

Definition: Post-Graduation Loan Delay

Explanation: A time period after leaving school or graduating during which no payments are due on student loans.

Return

Definition: Investment Earnings Potential

Explanation: The amount of profit or loss you could potentially make on an investment, often expressed as a percentage.

FAFSA Student Loans – FAFSA Meaning – FAFSA Definition

FAFSA Definition

The FAFSA, or Free Application for Federal Student Aid, is a crucial form for students seeking financial aid for college. It assesses eligibility for grants, loans, and work-study programs. Completing the FAFSA is often the first step in unlocking access to higher education funding. It’s important for students and families to fill it out annually to maximize aid opportunities.

Cost of Attendance

Definition: The total expense of attending college, including tuition, room, board, and other related costs.

Explanation: This term encompasses all expenses a student incurs while attending college. It includes direct costs like tuition fees and indirect costs such as books, transportation, and personal expenses.

Expected Family Contribution

Definition: The amount a student’s family is anticipated to contribute towards college costs.

Explanation: Calculated based on the Free Application for Federal Student Aid (FAFSA), this figure is used to determine eligibility for need-based financial aid.

Scholarships or Grants

Definition: Financial aid awarded to students that does not require repayment.

Explanation: These funds are provided by various sources, such as governments, colleges, and private organizations, to assist students in covering their educational expenses.

Work-Study

Definition: A federal program providing part-time employment to students to help finance their education.

Explanation: This program allows students to earn money through part-time jobs on or off campus, contributing to their college expenses while gaining work experience.

Federal Direct Government Loans

Definition: Student loans provided by the federal government.

Explanation: These loans, including subsidized (need-based) and unsubsidized (not need-based), are a common way to finance education, offering lower interest rates and flexible repayment options.

Parent PLUS Loans

Definition: Federal loans that parents of dependent undergraduate students can use to help pay for college.

Explanation: These loans cover education expenses not met by other financial aid, with the parents being the primary borrowers.

FSA ID

Definition: A username and password combination that provides access to Federal Student Aid’s online systems.

Explanation: It serves as a legal signature and must not be shared with anyone, ensuring secure access to personal and financial information on federal student aid websites.

Federal School Code

Definition: A unique code assigned to each college that is eligible for federal financial aid.

Explanation: Students use this code when filling out the FAFSA to indicate which colleges should receive their financial information.

Student Aid Index (SAI)

Definition: A measure that assesses a family’s ability to pay for a year of college.

Explanation: Formerly known as the Expected Family Contribution, this index helps determine a student’s eligibility for need-based financial aid.

FAFSA Submission Summary (FSS)

Definition: A summary report of the information provided in the FAFSA.

Explanation: This document reviews the data submitted in the FAFSA application, ensuring accuracy and completeness of the financial information.

FUTURE Act Direct Data Exchange (FA-DDX)

Definition: A system for electronically transferring tax information into the FAFSA.

Explanation: This technology simplifies the FAFSA application process by allowing applicants to directly import their IRS tax return information.

Award Letter

Definition: A document from a college outlining the financial aid package offered to a student.

Explanation: This letter details the types and amounts of financial aid (grants, loans, scholarships) a student is eligible for at a particular college.

Bursar

Definition: The college official responsible for managing student billing and payments.

Explanation: The bursar’s office handles all financial transactions between the student and the college, including tuition, fees, and refunds.

CSS Profile

Definition: A detailed financial aid application used by many colleges and scholarship programs.

Explanation: Unlike the FAFSA, the CSS Profile provides a more comprehensive analysis of a family’s financial situation for non-federal financial aid.

Demonstrated Need

Definition: The gap between the cost of attendance and a family’s ability to pay.

Explanation: This term refers to the amount of financial assistance a student requires, determined by subtracting the Expected Family Contribution from the total cost of attendance.

Enrollment Status

Definition: A classification based on the number of credit hours a student is taking.

Explanation: Enrollment status can be full-time, part-time, or less and affects eligibility for financial aid and tuition rates.

Financial Aid

Definition: Funding provided to students to help cover the costs of their post-secondary education.

Explanation: This aid can take the form of grants, loans, scholarships, and work-study programs and is intended to make education more accessible.

Financial Aid Office/Officer

Definition: A college department or personnel dedicated to assisting students with financial aid.

Explanation: This office guides students and their families through the process of applying for and receiving various forms of financial assistance.

529 Savings Plans

Definition: State-sponsored investment plans for setting aside funds for future college expenses.

Explanation: These plans offer tax advantages and are a popular way for families to save for their children’s education.

Free Application for Federal Student Aid (FAFSA)

Definition: The official form used to apply for federal financial aid.

Explanation: This application is critical for students seeking financial aid, as it determines their eligibility for federal grants, loans, and work-study programs.

Grant

Definition: A form of financial aid that does not need to be repaid, often based on financial need.

Explanation: Grants are typically provided by the government, educational institutions, or private organizations to support students’ educational expenses.

Merit Aid

Definition: Financial assistance awarded based on a student’s achievements.

Explanation: Unlike need-based aid, merit aid is given for academic, athletic, artistic, or other talents and accomplishments.

Need-Based Financial Aid

Definition: Financial assistance provided to students who cannot afford the full cost of college.

Explanation: This type of aid is determined by the student’s financial need and includes grants, some scholarships, and subsidized loans.

Need-Blind Admission

Definition: An admission policy where a college evaluates an applicant without considering financial circumstances.

Explanation: Under this policy, a student’s ability to pay tuition does not influence the admission decision, promoting equal opportunity.

Net Price

Definition: The actual cost a student pays to attend a college after subtracting financial aid from the total cost of attendance.

Explanation: This price provides a more accurate estimate of college expenses than the sticker price, as it factors in scholarships and grants.

Net Price Calculator

Definition: An online tool that estimates the actual cost of attending a specific college.

Explanation: This calculator helps students and families understand what they might pay after accounting for scholarships and grants.

Outside Scholarship

Definition: A scholarship awarded by organizations outside the student’s college or university.

Explanation: These scholarships can come from private companies, non-profits, or community groups and help reduce the cost of education.

Priority Date

Definition: The deadline by which applications, often for financial aid or admissions, must be received for the best consideration.

Explanation: Meeting this date increases the likelihood of receiving optimal financial aid or admission offers.

Residency Requirements

Definition: Criteria that determine a student’s eligibility for in-state tuition and state financial aid.

Explanation: These requirements often include a minimum duration of residence in the state prior to enrollment.

Scholarship

Definition: Financial aid awarded to students, which does not require repayment.

Explanation: Scholarships are based on various criteria, including academic achievement, talents, or specific characteristics, and help lower the cost of education.

Student Aid Report (SAR)

Definition: A report summarizing the information submitted in the FAFSA and the Expected Family Contribution.

Explanation: The SAR is provided to students after submitting the FAFSA and is used to determine eligibility for federal student aid.

Transcript

Definition: The official record of a student’s academic performance and courses taken.

Explanation: This document is essential for college applications and transferring credits and includes grades, courses, and credit hours.

Undergraduate

Definition: A student pursuing an associate or bachelor’s degree.

Explanation: Undergraduates are typically enrolled in a college or university and have not yet earned a higher-level degree.

Work-Study (repeated)

Definition: A financial aid program providing part-time jobs for undergraduate and graduate students with financial need.

Explanation: This program helps students earn money to pay for education expenses while gaining practical work experience.

Appreciating Assets

Definition: Assets that increase in value over time.

Explanation: Appreciating assets, such as real estate or stocks, grow in value due to factors like market demand, inflation, and improvements. They are crucial for wealth building.

Depreciating Asset

Definition: Assets that lose value over time.

Explanation: Depreciating assets, like cars or electronics, diminish in value due to wear, obsolescence, or market conditions. They represent a decreasing worth over their useful life.

Down Payment

Definition: An initial, large payment made when buying an expensive item on credit.

Explanation: A down payment, often required in transactions like home purchases, reduces the loan amount, potentially leading to better financing terms.

Landlord

Definition: An individual or entity that rents out property.

Explanation: Landlords own properties and lease them to tenants. They are responsible for property management and ensuring habitable conditions.

Lease

Definition: A contract granting use or occupation of property.

Explanation: A lease is a legal agreement where a landlord allows a tenant to use a property for a specified time and rent, with outlined terms and conditions.

Maintenance Costs

Definition: Expenses incurred to keep property or equipment in good condition.

Explanation: Maintenance costs cover repairs, updates, and routine care essential for property upkeep and value preservation.

Mortgage

Definition: A loan specifically for purchasing property.

Explanation: Mortgages, secured by the property itself, are repaid over time with interest. They enable property ownership through structured payments.

Pet Deposit

Definition: A refundable or non-refundable fee for tenants with pets.

Explanation: Pet deposits cover potential damages caused by pets in rental properties. They may be part of the lease agreement in pet-friendly rentals.

Security Deposit

Definition: A sum paid by tenants to cover potential damages.

Explanation: Security deposits, typically refundable, are held by landlords during the lease term to offset damages or unpaid rent.

Tenant

Definition: An individual who rents property from a landlord.

Explanation: Tenants have the right to occupy and use rented property as per the lease terms while maintaining the property and paying rent.

529 College Savings Plan

Definition: A tax-advantaged savings plan for future education costs.

 Explanation: These plans, sponsored by states or institutions, help families save for college expenses, offering tax benefits and investment options.

Federal Work-Study Program

Definition: A part-time work program to help students finance education.

Explanation: This program provides students with part-time jobs, often related to their field of study, to assist with educational expenses.

Pell Grant

Definition: A subsidy by the U.S. federal government for students in need.

Explanation: Pell Grants, which don’t require repayment, provide financial aid to undergraduate students with significant financial need.

Trade School

Definition: An educational institution focusing on job-specific skills.

 Explanation: Trade schools offer vocational education in fields like plumbing, electric work, and culinary arts, providing practical training for specific careers.

Community College

Definition: A two-year institution offering associate degrees and certificates.

Explanation: Community colleges provide affordable education, often serving as a stepping stone to a four-year college or direct entry into the workforce.

Public University/College

Definition: An educational institution funded by government sources.

 Explanation: Public universities or colleges offer a range of undergraduate and graduate programs, typically at lower tuition rates than private institutions.

Private University/College

Definition: An education institution not funded by government sources.

Explanation: Private universities or colleges, often with higher tuition rates, are funded through tuition, donations, and endowments.

Associate’s Degree

Definition: A two-year undergraduate degree.

Explanation: Associate’s degrees, offered by community colleges, cover general education and specialized courses, often leading to entry-level jobs or further education.

Bachelor’s Degree

Definition: A four-year undergraduate degree.

Explanation: Bachelor’s degrees, providing a broader education in a chosen field, are prerequisites for many careers and advanced degrees.

Master’s Degree

Definition: An advanced academic degree following a bachelor’s degree.

Explanation:Requires 1-2 years of study focusing on a specific field, often involving research or a thesis. It deepens professional knowledge and can lead to higher-level careers or doctoral studies.

Doctorate Degree (Ph.D., M.D., D.D.S., J.D.)

Definition: The highest level of academic degree in various disciplines.

Explanation: Involves extensive study and research. Ph.D. is for academic research, M.D. for medicine, D.D.S. for dentistry, and J.D. for law. It prepares for academia, specialized professions, or research.

Federal Work-Study Program

Definition: A U.S. program providing part-time jobs to students with financial need.

Explanation: Offers jobs related to the student’s study or community service. Helps students finance their education while gaining work experience relevant to their careers.