Financial Aid and Scholarships Flashcards
7 cards from real CEP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Financial Aid and Scholarships flashcards as text
Which repayment plan bases monthly federal student loan payments on a percentage of the borrower's discretionary income?
Answer: Income-Driven Repayment (IDR) Plan
Income-Driven Repayment plans cap monthly payments at a set percentage of discretionary income and offer loan forgiveness after 20–25 years of qualifying payments.
A student wins a $10,000 private scholarship. The college reduces the student's institutional grant by $10,000. This practice is called:
Answer: Scholarship displacement
Scholarship displacement occurs when a college reduces its own aid to offset an outside scholarship, leaving the student's net cost unchanged.
What is the primary difference between a subsidized and an unsubsidized federal Direct Loan?
Answer: The government pays interest on subsidized loans during in-school and deferment periods
For subsidized Direct Loans, the federal government covers interest while the student is enrolled at least half-time and during grace and deferment periods.
529 college savings plan withdrawals used for qualified higher education expenses are:
Answer: Tax-free at the federal level
Earnings on 529 plan withdrawals used for qualified education expenses are exempt from federal income tax.
Which of the following best describes the role of an educational planner when helping a family with scholarship searches?
Answer: Identify a diverse portfolio of local, national, and institutional scholarship opportunities matched to the student's profile
Educational planners help families build a comprehensive, personalized scholarship search strategy spanning institutional, local, and national sources aligned with the student's strengths.
A college's 'Cost of Attendance' (COA) includes all of the following EXCEPT:
Answer: The student's Expected Family Contribution (EFC)
COA is the school's estimated total cost of enrollment; the EFC is separately calculated from FAFSA data and is not a component of COA.
Under Public Service Loan Forgiveness (PSLF), a borrower must make how many qualifying monthly payments before the remaining federal loan balance is forgiven?
Answer: 120
PSLF requires 120 qualifying monthly payments (10 years) while working full-time for an eligible government or nonprofit employer.