Paying for College Quiz

Correct answer is B - Talk it over. Every family's circumstances are different, so you need to talk things over as a family and decide what would work best for you.

Correct answer is C - Credit card. Credit cards (especially cash advances) are a terrible way to pay for major college expenses. They are fine for smaller expenses like books or emergencies, but you should use grants, loans, scholarships, and other means to cover the major expenses.

Correct answer is D - All of the above. Any type of student aid you receive - not just free money - is considered to be financial aid. To receive any of these forms of financial assistance, you have to apply for financial aid. Begin the process by completing the Free Application for Federal Student Aid (FAFSA).

Correct answer is C - As soon as possible after January 1. You do not have to be accepted or know where you plan to attend in order to apply for financial aid. But be sure to check on state and college deadlines and file your applications by the earliest deadline.

Correct answer is C - Every year that you want to receive financial aid. Each year you must file financial aid applications in order to update income, assets, and anything else that may have changed. So be sure to file every year by the appropriate deadlines.

Correct answer is A - Less than 25% is covered by free money. Over 75% of college costs are covered by students and parents through income, savings, and borrowing. So while it's important to save for college and use available resources, it's also very important to search extensively for free sources of funding in order to keep borrowing down.

Correct answer is B. Middle income families tend to borrow the most to pay for college. High income families rely more on income and savings, while low income families rely more on grants and scholarships.

Correct answer is D - More than 60%. Student loans are the largest source of financial aid available for college students, and they do not have to be repaid until after you leave school. But they do have to be repaid, so find lots of free money first and then borrow to cover the rest of your college expenses.

Correct answer is D - $23,000! Most students take five years to get a four year degree, and most students borrow every year. So try to keep your debt down by getting done on time and finding free money.

Correct answer is A - Plan on paying the total cost minus free money. Regardless of what happens in the financial aid process, in the end the amount you pay will be the cost of the school minus any free money you receive. You are then responsible to cover the difference through income, savings, and borrowing. So take steps to reduce your costs as much as possible, and secure as much free money as you can each year.