Finance Chapter 5 Review Flashcards

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Questions and Answers

What is mentorship?

A developmental partnership through which one person shares knowledge, skills, and perspective to foster the personal and professional growth of someone else.

What is a grant?

A form of federal or state financial aid that does not need to be repaid, needs based, free money.

What is work study?

A program that allows students to work part-time while continuing their studies, provided by schools, pay directly to student or pay to their tuition.

What is an associate's degree?

An undergraduate academic degree awarded by colleges upon completion of a course of study lasting two years. Signup and view all the answers

What does FAFSA stand for?

Free Application for Federal Student Aid. Signup and view all the answers

Is 'good debt' a money myth that portrays student loans as the only financial option for college funding?

True Signup and view all the answers

What are scholarships?

A merit-based form of financial aid that does not need to be repaid; usually offered on the basis of academic, athletic or other achievements. Signup and view all the answers

What is a trade school?

A type of higher learning school that focuses on job skill training for a specific career field rather than academics in liberal arts. Signup and view all the answers

Our culture thinks student loan debt is normal and that it's an acceptable way to pay for college.

True Signup and view all the answers

A four-year degree is necessary regardless of what career you're pursuing.

False Signup and view all the answers

What is the total estimated student loan debt outstanding in the U.S.?

$1 Trillion Signup and view all the answers

Which of the following is NOT a good option when it comes to paying for your education: Ask your parents to take out a loan?

Ask your parents to take out a loan Signup and view all the answers

Which of the following are ways that you can invest in yourself? (Select all that apply)

Find a mentor Signup and view all the answers

Explain how you can get an education debt-free after high school.

Scholarships, pay in cash, sell things, grants from FAFSA and not loans. Signup and view all the answers

Based on what you've learned, do you believe it is realistic to graduate debt-free? Why or why not?

Yes, get scholarships and grants. Signup and view all the answers

Write down three reasons why you should avoid student loans.

Debt: loans can lead to a cycle of repayment; Interest: you pay back tuition/loan debt plus interest; Stress: difficulty in managing payments and affording other expenses. Signup and view all the answers

Select one of the student stories and describe the effect student loan debt had on that person's life.

Ruins relationships, credit card debt, use job money to buy a car/living instead of tuition. Signup and view all the answers

What excites you the most about life after high school?

Getting a job and being responsible with my money, doing things on my own. Signup and view all the answers

Study Notes

Key Terms and Definitions

Mentorship: A developmental partnership where knowledge, skills, and perspectives are shared to facilitate personal and professional growth.
Grant: Financial aid from federal or state sources that does not require repayment; considered need-based and a form of free money.
Work Study: A program enabling students to work part-time while studying; payment can go directly to students or be applied to tuition costs.
Associate's Degree: An undergraduate degree awarded after a two-year college course.
FAFSA: An annual form filled out by current and prospective college students to assess eligibility for financial aid.
"Good Debt": A misconception suggesting that student loans are the only feasible option for financing college education.
Scholarships: Non-repayable, merit-based financial aid awarded for academic, athletic, or other achievements.
Trade School: An institution focusing on vocational training tailored to specific careers, rather than traditional liberal arts education.

Cultural Perspectives and Myths

Student loan debt is often normalized within culture, perceived as an acceptable method for financing college education.
The belief that a four-year degree is required for every career path is challenged; not all professions necessitate a bachelor's degree.

Financial Insights

The total estimated outstanding student loan debt in the U.S. is approximately $1 trillion.
Advising against taking out loans, particularly suggesting not to ask parents for financial support through loans.

Self-Investment Strategies

Methods to invest in oneself include mentoring, reading, and surrounding oneself with like-minded individuals.

Debt-Free Education Approaches

Achieving a debt-free education after high school can be accomplished through scholarships, cash payments, selling possessions, and obtaining grants, steering clear of loans.

Realism of Graduating Debt-Free

Graduating debt-free is feasible, contingent upon securing scholarships and grants.

Reasons to Avoid Student Loans

Debt: Loans lead to financial burdens as all earnings are directed towards repayments.
Interest: Borrowers repay not only the principal loan amount but also accrued interest.
Stress: Managing finances and debts can lead to anxiety, hindering enjoyment of life.

Impact of Student Loan Debt

Student loan debt can adversely affect personal relationships and overall financial health, often leading to prioritization of debt repayment over essential living expenses.

Life After High School Excitements

The prospect of employment and financial responsibility, along with independence, is a key motivator for life after high school.

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Description

Test your knowledge of key financial concepts with these flashcards from Chapter 5. This set includes terms like mentorship, grants, and work study, which are essential for understanding financial aid. Perfect for students preparing for exams or seeking a quick review of the material.