Colleges Financial Aid & Scholarships 1 — Questions and Answers
Question 1: What is the Expected Family Contribution (EFC) now called under the FAFSA Simplification Act?
- Student Aid Index (SAI) (Correct answer)
- Family Financial Obligation (FFO)
- Need Assessment Score (NAS)
- Federal Eligibility Rating (FER)
Correct answer: Student Aid Index (SAI)
The FAFSA Simplification Act replaced the term EFC with Student Aid Index (SAI) starting with the 2024–25 award year.
Question 2: What is a Pell Grant?
- A federal grant for undergraduates with exceptional financial need (Correct answer)
- A merit-based scholarship from private donors
- A loan that must be repaid after graduation
- A state-funded work-study award
Correct answer: A federal grant for undergraduates with exceptional financial need
The Pell Grant is a federal need-based grant available to eligible undergraduates that does not need to be repaid.
Question 3: What is the maximum annual Pell Grant award for 2024–25?
- $7,395 (Correct answer)
- $5,500
- $10,000
- $4,000
Correct answer: $7,395
For the 2024–25 academic year, the maximum Federal Pell Grant award is $7,395 per year.
Question 4: What is a subsidized student loan?
- A federal loan where the government pays interest while the student is in school (Correct answer)
- A loan with the lowest origination fee
- A private loan co-signed by a parent
- A loan only available to graduate students
Correct answer: A federal loan where the government pays interest while the student is in school
With subsidized loans, the US Department of Education pays the interest that accrues while the borrower is enrolled at least half-time.
Question 5: What is a 529 college savings plan?
- A tax-advantaged savings account for education expenses (Correct answer)
- A federal loan repayment program
- A scholarship fund administered by states
- An IRA account for education costs
Correct answer: A tax-advantaged savings account for education expenses
A 529 plan is a state-sponsored investment account that grows tax-free when funds are used for qualified education expenses.
Question 6: What is the CSS Profile used for?
- Applying for institutional financial aid at private colleges (Correct answer)
- Applying for federal financial aid
- Registering for AP exams
- Declaring a college major
Correct answer: Applying for institutional financial aid at private colleges
The CSS Profile is a financial aid application used by about 200 private colleges and universities to award their own non-federal aid.
Colleges Financial Aid & Scholarships 1
What is the Expected Family Contribution (EFC) now called under the FAFSA Simplification Act?