General Principles Flashcards

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1
Q

how may days of nonpayment will cause federal student loans to go into default?

A

270

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2
Q

for FAFSA who is considered the primary parent

A
  1. where the student lives the longest during the year

2. if 50/50, then whoever provides more support

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3
Q

emergency reserves

A

total monthly expenses - (savings contributions + taxes)

x 3 months or 6 months

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4
Q

American opportunity tax credit

A

$2,500 - dollar for dollar credit for 100% of first $2,000 of qualified expenses, and 25% of next $2,000

first 4 years of post secondary education
student must be enrolled at least half time
refundable up to 40% of credit
per student, not per family

no hope for dope (can’t use if you have a felony drug conviction)

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5
Q

lifetime learning credit

A

$2,000 per family
do not need to be full time or undergrad
can claim for an unlimited number of years

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6
Q

EFC calc

A

total cost
- (22-47% parent income + max 5.64% parent assets)
- (50% student income + 20% student assets)
= EFC

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7
Q

529 and Coverdells effect on EFC

A

if parent owned then counts towards parent rate

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8
Q

relative owned 529 effect on EFC

A

two year look back for FAFSA
would reduce future financial aid eligibility by 50% of the distribution amount

use in the last two years of college to limit impact on financial aid

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9
Q

student loan forgiveness

A

generally forgiven amount is taxable income

unless death, disability, or provision in loan (certain professions, certain time, class of employers)

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10
Q

when is a federal student loan delinquent

A

after first payment is missed

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11
Q

when default of student loan occurs what happens

A

entire balance is due and no longer eligible for federal student loans or grants

gov can collect debt by
seizing refund, garnishing 15% of wages, taking 15% of SS or railroad benefits

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12
Q

Fiduciary duty

A
  1. duty of loyalty
  2. duty of care
  3. duty to follow instructions
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13
Q

6 sections of The Standards

A
  1. duties owed to clients
  2. financial planning process and application of the practice standards for financial planning process
  3. practice standards for financial planning process\
  4. duties owed to firms and subordinates
  5. duties owed to CFP board
  6. prohibition on circumvention
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14
Q

forms of discipline

A

private censure
public letter of admonition
suspension
revocation

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15
Q

must report incidents of adverse conduct within

A

30 days

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16
Q

conduct that is unacceptable and will ALWAYS bar an individual from being certified

A
  1. theft, embezzlement, other financial crimes
  2. tax fraud or tax crimes
  3. revocation of financial professional license
  4. felony for any degree of rape or murder
  5. felony for any other violent crime within the last 5 years
17
Q

conduct that is presumed to be unacceptable

will bar an individual from being certified unless the individual petitions the disciplinary and ethics commission

A
  1. two or more personal bankruptcies
  2. revocation or suspension of non financial license
  3. suspension of a financial professional
  4. felony conviction for nonviolent crimes within the last 5 years
  5. felones conviction for violent crimes other than murder or rape that occur more than 5 years ago
18
Q

Ch 7 bankruptcy

A

discharge of debts

voluntary and involuntary liquidation

19
Q

ch 7 debts that will NOT be discharged

A
back taxes  (3 years) 
debts associated with fraud 
alimony and child support 
debt due to intentional torts 
student loans 
consumer debts with more than $650 for luxury goods or services owed to a single creditor
20
Q

ch 11 bankruptcy

A

reorganization

debtor remains in possession and may continue to operate business

21
Q

ch 13 bankruptcy

A

adjustment of debts of individuals with regular income

22
Q

economic and resource approach

A

clients are assumed to be rational
financial planner is the agent of change
focus on obtaining and analyzing data such as cash flows, assets, and debts

23
Q

classical economics approach

A

cost benefit and risk return trade offs

believes in increasing financial resources or reducing financial expenditures

24
Q

strategic management approach

A

clients goals and values drive the client planner relationship
conducting a SWOT analysis

25
Q

cognitive behavioral approach

A

clients attitudes, beliefs, and values influence their behavior
planners attempt to substitute negative believes that lead to poor financial decisions with positive attitudes

26
Q

psychoanalytic approach

A

Freudian psychodynamic theory or Gesalt theory

not widely used by planners