Financial Aid and Scholarships Flashcards

What is the maximum annual subsidized Stafford loan amount for a dependent undergraduate freshman?

Answer: $3,500

Dependent freshmen can borrow a maximum of $3,500 in subsidized Stafford loans per academic year.

Which federal loan program allows graduate students and parents of undergraduates to borrow up to the full cost of attendance?

Answer: Direct PLUS Loan

Direct PLUS Loans (Graduate PLUS and Parent PLUS) can cover the cost of attendance minus any other financial aid received.

A student takes out a Direct Unsubsidized Loan. Interest begins accruing:

Answer: Immediately upon disbursement

Unlike subsidized loans, interest on unsubsidized loans begins accruing at the time of disbursement, even while the student is enrolled.

The Expected Family Contribution (EFC) is now officially called what under the FAFSA Simplification Act?

Answer: Student Aid Index (SAI)

The FAFSA Simplification Act renamed the EFC to the Student Aid Index (SAI) to better reflect that it is not necessarily the amount a family will pay.

When comparing financial aid offers, an educational planner should advise a family to calculate the 'net price' by:

Answer: Subtracting all grants and scholarships from the total cost of attendance

Net price equals the total cost of attendance minus all gift aid (grants and scholarships), representing what the family must actually fund.

Which of the following is NOT a typical eligibility requirement for federal financial aid?

Answer: Graduating in the top 25% of your high school class

Federal aid does not require students to have graduated in any class rank; high school rank is not part of Title IV eligibility criteria.

A student received a scholarship that exceeds their tuition and fees. The excess scholarship funds are generally:

Answer: Taxable as income to the student

Scholarship amounts that exceed qualified education expenses (tuition, fees, required books) are generally taxable income for the student.