(Unit 2) College & Personal Finances Vocab

Question 1

Common Application

Answer 1

An undergraduate college
admission application to more than 900 member colleges and universities in the U.S., Canada, China, Japan, and many European countries.

Question 2

Deferment

Answer 2

A type of payment where you purchase something and
pay for it later.

Question 3

Forbearance

Answer 3

A type of loan for a temporary suspension of principal payments or to reduce your monthly payment amount for up to 12 months.
- Happens if you do NOT qualify for deferment.

Question 4

Grace Period

Answer 4

A period of time after a deadline where financial obligation (e.g.: late fee or payment) may be met without penalty or cancellation.

Question 5

Grants

Answer 5

Financial aid that is given based on financial need.
- does NOT need to be repaid

Question 6

Scholarships

Answer 6

Financial aid that is given based on merit.
- does NOT need to be repaid

Question 7

What’s the difference between a scholarship
and a grant?

Answer 7

Scholarships are merit-based and grants are
need-based.

Question 8

Student Loans

Answer 8

Loans that are given in order to pay for education expenses
and must be paid back at a later time.

Question 9

Subsidized Loans

Answer 9

Loans that do not accumulate interest while a student is enrolled in
school.
- The interest is paid by the government.

Question 10

Unsubsidized Loans

Answer 10

Loans that accumulate interest while a student is enrolled in
school. The interest is NOT paid by the government.

Question 11

Interest Rates

Answer 11

The percentage amount that a lender charges a borrower each year in order to borrow money.
- Price you pay for borrowing money

Question 12

Private Loan

Answer 12

Loans that are offered by banks and credit unions—NOT the government.
- Private student loans can help you pay for college after you’ve explored scholarships and grants.
- Private loans are credit-based.

Question 13

Award Letter

Answer 13

A document (“letters”) sent by a college or university providing information on the cost of attendance at a college for an academic year and any grants, scholarships, work-study opportunities, and loans the student is eligible to receive.

Question 14

Financial Aid

Answer 14

Money that helps pay for education.
- NOTE: Grants, work-study, loans, and scholarships help make educational opportunities (college, career school, etc.) more affordable.

Question 15

Tuition

Answer 15

The cost of taking classes at your school; your school charges you for the actual instruction.

Question 16

Graduated Repayment Plan

Answer 16

A federal student loan repayment program for those who expect their incomes to rise over time and want to start by repaying with lower payments.
- Payments start off low and increase every 2 years or so.

Question 17

Income-based Repayment Plan (IBR)

Answer 17

A federal student loan repayment program that adjusts the amount you owe every month based on your income and family size.

Question 18

Types of Grants: Federal Pell Grant

Answer 18

A type of federal grant typically awarded to undergraduate students who display exceptional financial need.
- Students have to have earned a bachelor’s, graduate, or professional degree.
- Max. $5775 per year (Amount changes based on the year (For 2023-24: $6,895))

Question 19

Types of Grants: Federal Supplemental Educational Opportunity Grant

Answer 19

A type of federal grant typically awarded to the most high needs students.

Question 20

Types of Grants: TEACH grant

Answer 20

A type of federal grant for students who plan on going to teach after college.

Question 21

Types of Grants: Work Study

Answer 21

A type of federal grant for students who work a part-time job on campus in return for paying off college expenses.

Question 22

Types of Grants: California Grant (Cal Grant)

Answer 22

A type of financial aid specifically for students attending a UC, CSU, CA community college, or other qualifying schools in California.

Question 23

Types of Loans: Stafford Loans

Answer 23

A type of low-interest loan with an interest rate range of around 3.86-5.41%.
- Maximum $5.5k per year.
1) Subsidized: The govt. pays the interest rate on your loan while you’re still in school.
2) Unsubsidized: The govt. does NOT pay the interest rate on your loan (Therefore, it will add up)

Question 24

Types of Loans: Perkins Loans

Answer 24

A type of subsidized loan with a maximum of around $5.5 per year and about a 5% interest rate.

Question 25

Types of Loans: PLUS Loans

Answer 25

A type of supplemental loan that helps cover tuition and has an interest rate of around 6.41%.

Question 26

How to apply for grants/loans?

Answer 26

1) Fill out the FAFSA form for EACH year that you need aid. (Will cover all federal govt. loans and grants)
2) Some grants require a separate application (Talk to your school financial aid office for more information)

Question 27

How to apply for scholarships?

Answer 27

1) Research online for websites