GP Econ ConsLend EdFunding Psychology

Question 1

GDP

Answer 1

C+I+G+(ex-im)

Question 2

Emergency Planning do first

Answer 2

Guardianship, life insurance, pay down high cost cc debt, then build cash reserves

Question 3

FDIC covers…

Answer 3

$250k per person per account category
Combine IRAs
Combine personal accounts & sole prop

Question 4

Chapter 7

Answer 4

Wipe out all debt except alimony, child support, taxes<3 years due, student loans, secured debt. But you have to sell your personal property.

Question 5

Chapter 13

Answer 5

Reorg. Keep all assets but repay debt. To be eligible assets <$419k secured and <1.257MM unsecured

Question 6

Consumer credit protection

Answer 6

Right to know cost and terms

Question 7

Fair credit billing

Answer 7

Right to have billing mistakes resolved

Question 8

Credit score

Answer 8

35% Payment history
30% Amount owed
30% Length of credit history
10% New credit
10% Credit mix

Question 9

FICO

Answer 9

800 less 60 less 70 less 80

Question 10

VA and USDA loans

Answer 10

No $ down, no PMI

Question 11

FHA loans

Answer 11

3.5-20% down, PMI needed

Question 12

PITI

Answer 12

Principal, interest, taxes, insurance (PMI and homeowners)

Question 13

Housing cost ratio

Answer 13

PITI < 28%

Question 14

Total debt ratio for housing

Answer 14

PITI + Debt < 36%

Question 15

Consumer debt for housing

Answer 15

Non-housing debt < 20%

Question 16

Coverdell

Answer 16

No limits on withdrawals
Max annual contribution is $2k/kid until age 18.
You can invest in whatever you want
There are income restrictions

Question 17

UGMA/UTMA

Answer 17

These are simply custodial accounts, completed gift to kid.
Kiddie tax applies.
No restrictions on anything

Question 18

Series EE and I bonds

Answer 18

Savings bond in parents’ name, buyer must be 24+.
Interest grows tax free when used for education expenses
Can buy $10k/year/owner
If you withdraw more $ than needed for education it comes out pro-rata for taxes

Question 19

529 Able plan

Answer 19

Disabled or blind before 26
Earnings aren’t taxed if used for disability expenses.
You can only put in $18k/year, contribs aren’t tax deductible
$100k is shielded from financial aid calcs

Question 20

Grants

Answer 20

Pell and Federal Supplemental Opportunity Grant (FSOG). Tax Free

Question 21

Scholarships

Answer 21

Tax free

Question 22

Student Loans - Federal Direct Subsidized

Answer 22

Subsidized. Undergrad only, DOE pays interest for first 6 months out of school.

Question 23

Student Loans - Federal Direct Unsubsidized

Answer 23

Undergrad + Grad, no financial need required. You pay all interest during and after college.

Question 24

Student Loans - Direct PLUS/PLUS loans

Answer 24

Undergrad + Grad. DOE is the lender must have good credit, max loan is cost of attendance less any financial aid received.

Question 25

Financial Aid - FAFSA

Answer 25

2 year lookback on financials. Get family help in years 3 and 4 where it won’t hurt you

Question 26

Expected Family Contribution Assets

Answer 26

5.64% parents (except home equity and retirement plans)
20% of kids

Question 27

Expected Family Contribution Income

Answer 27

22-47% of parents AGI - taxes and living expenses
50% of kids over $9,410

Question 28

American Opportunity Tax Credit

Answer 28

100% on first $2k expenses, 25% on next $1k. $2500 max / year / kid
Limited to 4 years
Must be pursuing a degree/credential
Can’t have a felony drug conviction

Question 29

Lifetime Learning Credit

Answer 29

20% on first $10k expenses. $2k limit per family
Unlimited # of years