College Financial Aid Basics

Question 1

What does FAFSA stand for?

Accepted Answer

Free Application for Federal Student Aid

Answer

FAFSA stands for the Free Application for Federal Student Aid, the form used by U.S. students to apply for federal grants, work-study, and loans.

Question 2

What is the key difference between a scholarship and a student loan?

Accepted Answer

A scholarship does not need to be repaid, while a loan must be repaid, usually with interest

Answer

Scholarships are gift aid that does not need to be repaid, whereas loans are borrowed money that must be repaid over time, typically with interest.

Question 3

What does the term 'cost of attendance' (COA) include beyond tuition?

Accepted Answer

Estimated costs such as housing, food, books, transportation, and fees in addition to tuition

Answer

Cost of attendance is a comprehensive estimate that includes tuition and fees plus indirect costs like housing, food, books, supplies, and transportation, used to calculate financial need.

Question 4

What is a 'subsidized' federal student loan?

Accepted Answer

A loan where the government pays the interest while the student is enrolled at least half-time

Answer

With a subsidized federal loan, the U.S. Department of Education pays the interest that accrues while the student is in school at least half-time, during the grace period, and during deferment.

Question 5

What is a Pell Grant?

Accepted Answer

A federal need-based grant for undergraduate students that does not need to be repaid

Answer

The Pell Grant is a federal, need-based grant awarded to undergraduate students who demonstrate significant financial need, and unlike a loan, it generally does not require repayment.

College Practice Test

College Practice Test

College Financial Aid Basics