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Quizzes > Business & Finance > Finance & Economics

How Well Do You Know Financial Aid? Take the Quiz!

Ready for a student financial aid knowledge test? Dive into financial aid trivia questions now!

Difficulty: Moderate
2-5mins
Learning OutcomesCheat Sheet
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This financial aid quiz helps you check what you know about FAFSA, grants, loans, and college costs. Use it to spot gaps before you apply, learn a few tips, and then explore our scholarship quiz or try some finance trivia.

What does FAFSA stand for?
Federal Assessment for Student Aid
Free Application for Federal Student Aid
Free Assessment for Student Assistance
Federal Application for Student Aid
The FAFSA is the Free Application for Federal Student Aid, which students must submit each year to qualify for federal grants, loans, and work-study programs. It gathers financial details to calculate eligibility for aid. States and institutions also use FAFSA data to award their own funds.
Which federal program provides need-based grants that do not require repayment?
Federal Work-Study
Direct Subsidized Loan
Pell Grant
PLUS Loan
The Pell Grant is a need-based federal grant for low-income undergraduate students that does not require repayment. Direct Subsidized Loans are loans and must be repaid with interest. PLUS Loans require repayment and a credit check. Federal Work-Study provides part-time jobs rather than grant funds.
What is the Expected Family Contribution (EFC) used for in financial aid?
Setting the interest rate on student loans
Calculating the total cost of attendance
Assigning merit-based scholarship amounts
Determining a student's eligibility for need-based aid
The EFC is a number calculated from FAFSA data that estimates a family's ability to contribute to college costs. Schools subtract the EFC from the cost of attendance to determine a student's financial need. It does not set interest rates or directly dictate scholarship amounts.
What is the main difference between a subsidized and an unsubsidized federal student loan?
Subsidized loans have a higher interest rate than unsubsidized loans
Unsubsidized loans are only available to graduate students
Subsidized loans do not require repayment
The government pays interest on subsidized loans while the student is in school
Subsidized loans are need-based, and the U.S. Department of Education pays the interest while the borrower is enrolled at least half-time. Unsubsidized loans accrue interest from disbursement, and the borrower is responsible for paying all interest. Both types must be repaid.
When does the FAFSA application become available each year for new academic sessions?
January 1
July 1
October 1
April 1
The FAFSA form for the next academic year becomes available on October 1. Filing early helps students meet state and institutional deadlines for maximum aid eligibility. The federal deadline is later, but priority deadlines vary by state and school.
What type of financial aid requires the student to work in exchange for funding?
Pell Grant
Federal Work-Study
TEACH Grant
Direct Unsubsidized Loan
Federal Work-Study provides part-time jobs for undergraduate and graduate students with financial need, allowing them to earn money to help pay education expenses. Loans and grants do not involve employment. TEACH Grants require service obligations, not on-campus work.
In financial aid, what does COA stand for?
Cumulative Outstanding Aid
Contribution of Assets
Cost of Attendance
College Operational Aid
COA stands for Cost of Attendance and represents the total estimated expenses for one academic year, including tuition, fees, room, board, books, supplies, and personal expenses. It helps schools determine a student's financial need. COA varies by institution and student's living situation.
Which federal loan requires a credit check for parents?
Perkins Loan
Federal Work-Study
Parent PLUS Loan
Direct Subsidized Loan
Parent PLUS Loans require a credit check because they are federal loans the parent borrower uses to help pay for their child's education. Direct Subsidized and Unsubsidized Loans only require the student to meet eligibility criteria without credit checks. Work-Study is a job award.
What is the purpose of the FAFSA Verification process?
To calculate the COA
To extend the FAFSA filing deadline
To confirm the accuracy of the data reported on the FAFSA
To award merit-based scholarships
Verification is the process by which financial aid administrators check the validity of FAFSA information by requesting documentation. It ensures students receive the correct amount of aid. It does not affect filing deadlines, calculate COA, or award merit-based aid.
Which campus-based grant is awarded to students with exceptional financial need?
Federal Supplemental Educational Opportunity Grant (FSEOG)
Pell Grant
TEACH Grant
SMART Grant
FSEOG is a campus-based grant for undergraduates with exceptional financial need and is funded directly to schools to distribute. Pell Grants are federally funded and have broader need criteria. TEACH Grants require service obligations and SMART Grants are discontinued.
What does Satisfactory Academic Progress (SAP) refer to in financial aid?
The loan repayment schedule after graduation
The academic standards a student must meet to keep receiving financial aid
The minimum GPA for admission to college
The process for appealing aid decisions
SAP refers to a federal requirement that students maintain a certain GPA and complete a percentage of attempted coursework to remain eligible for federal financial aid. It is not an admission requirement, loan repayment plan, or appeal process. Schools set their own SAP standards within federal guidelines.
What was the maximum Federal Pell Grant award for the 2023 - 2024 award year?
$5,750
$6,895
$8,250
$7,395
For the 2023 - 2024 award year, the maximum Pell Grant award was $7,395. This amount is adjusted annually for inflation and budget appropriations. Not all students qualify for the maximum award; it depends on financial need and enrollment status.
Which condition automatically classifies a student as independent for federal aid purposes?
Enrolling in more than 12 credits per semester
Receiving a merit scholarship
Being 24 years of age or older
Living on campus
A student is automatically considered independent if they are at least 24 years old at the start of the award year, regardless of parental income. Living arrangements, scholarships, or credit load do not affect dependency status. Other criteria include being married, a veteran, or having dependents.
Which grant program requires recipients to teach in a high-need field at a low-income school for a service obligation?
Pell Grant
FSEOG
SMART Grant
TEACH Grant
The TEACH Grant requires recipients to agree to teach in a high-need field at a low-income elementary or secondary school for at least four academic years within eight years of completing their program. Failure to meet this obligation converts the grant into a Direct Unsubsidized Loan. Pell Grants and FSEOG do not have service requirements.
How is a student's financial need calculated?
Pell Grant amount minus tuition cost
Cost of Attendance minus Expected Family Contribution
Total aid awarded minus living expenses
Total loans borrowed minus scholarships received
Financial need is determined by subtracting the Expected Family Contribution (EFC) from the Cost of Attendance (COA). This calculation defines how much financial aid is needed to cover college costs. Other combinations do not represent the standard need formula.
Which piece of legislation first established the Pell Grant program?
Student Assistance Act of 1980
Education Amendments of 1972
College Cost Reduction Act of 2007
Higher Education Act of 1965
The Pell Grant program was created under Title IV of the Higher Education Act of 1965, signed into law during President Lyndon B. Johnson's administration as part of the War on Poverty. Later amendments adjusted funding and eligibility but did not establish it.
What is the aggregate loan limit for dependent undergraduate students borrowing Direct Subsidized and Unsubsidized Loans?
$31,000
$57,500
$23,000
$44,000
Dependent undergraduate students can borrow up to $31,000 in combined subsidized and unsubsidized Direct Loans, no more than $23,000 of which can be subsidized. These aggregate limits ensure responsible borrowing across multiple years.
How is the federal cohort default rate (CDR) calculated for schools?
Percentage of borrowers entering repayment who default within three years
Number of students who fail to graduate on time
Ratio of loan amount disbursed to repaid
Percentage of student loan applications denied
The cohort default rate measures the percentage of borrowers who enter repayment on federal student loans during a federal fiscal year and default within a three-year monitoring period. Institutions use this rate to assess loan performance. Graduation timing or application denial rates are unrelated metrics.
What is a consortium agreement in the context of federal financial aid?
A partnership between a college and private lender
A work-study employer agreement
An arrangement allowing Title IV aid across two or more institutions
A state-level scholarship program contract
A consortium agreement lets students in cross-registered programs receive Title IV aid by combining institutional charges and credits from multiple schools into a single FAFSA award. It is not related to private lenders, state scholarships, or work-study contracts.
What is the grace period length for Federal Direct Subsidized and Unsubsidized Loans after leaving school?
6 months
3 months
12 months
9 months
Both Federal Direct Subsidized and Unsubsidized Loans have a six-month grace period after the borrower leaves school, during which no payments are required. Interest on unsubsidized loans accrues during this time, while subsidized loans do not accrue interest until the period ends.
When does interest begin accruing on a Direct Subsidized Loan?
While the student is enrolled half-time
As soon as the loan is disbursed
Only if payments are missed
After the grace period ends
For Direct Subsidized Loans, the Department of Education pays interest while the borrower is enrolled at least half-time and during the six-month grace period. Interest begins accruing only after the grace period ends if the loan has not been paid. Other loan types may accrue interest at different times.
What is a loan origination fee?
A charge assessed on each federal loan disbursement to cover loan processing costs
An optional service fee for loan counseling
A fee for consolidating multiple loans
A penalty for missing a loan payment
An origination fee is a percentage of each federal student loan disbursement charged to cover administrative costs. It is deducted from the loan amount before funds are disbursed. It is not a late fee, consolidation fee, or counseling charge.
For FAFSA purposes, if a student's parents are divorced and not remarried, whose financial information is reported?
The custodial parent's information only
Both parents' information
The noncustodial parent's information only
No parental information is required
FAFSA rules require reporting the custodial parent's financial data when parents are divorced and neither have remarried. The custodial parent is the one with whom the student lived most in the last 12 months. Noncustodial parent's data is not included unless the custodial parent is remarried.
True or False: International non-citizens with F-1 status are eligible for federal student aid.
False
True
Federal student aid is generally only available to U.S. citizens and eligible non-citizens (such as permanent residents). F-1 international students are not eligible for federal grants or loans. They may seek institutional or private aid but not Title IV federal funds.
What is the service obligation requirement for a TEACH Grant recipient?
Work in any public school for two years after graduation
Complete a year of study abroad teaching
Teach for four academic years in a high-need field at a low-income school within eight years
Serve one year of volunteer work with Teach for America
TEACH Grant recipients must teach for at least four complete academic years in a high-need subject at a low-income elementary or secondary school within eight years of completing their program. Failure to fulfill this converts the grant to a Direct Unsubsidized Loan with interest. Other options do not meet TEACH requirements.
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Study Outcomes

  1. Understand financial aid fundamentals -

    Grasp essential financial aid questions and answers, including grants, loans, and work-study programs, to build a strong foundation for informed decision-making.

  2. Identify diverse aid options -

    Recognize various federal, state, and institutional financial aid types and their eligibility requirements to tailor support strategies effectively.

  3. Analyze real-life case scenarios -

    Interpret quiz-based scenarios to pinpoint optimal financial aid strategies, enhancing your ability to tackle similar situations in real-world contexts.

  4. Apply application best practices -

    Implement proven tips for completing FAFSA and scholarship applications accurately and efficiently to maximize aid opportunities.

  5. Evaluate and refine knowledge -

    Use quiz results to identify strengths and areas for improvement in your student financial aid knowledge, guiding further learning and preparation.

Cheat Sheet

  1. FAFSA Basics and Deadlines -

    Review the Free Application for Federal Student Aid (FAFSA) process, including key deadlines and required documents like tax returns and W-2s. Remember the mnemonic "FAFSA = Free, Annual, Form Starts Aid" to recall it's free, renewed yearly, and the gateway to federal aid (Source: studentaid.gov). Filing early maximizes eligibility for grants and work-study programs.

  2. Expected Family Contribution (EFC) Demystified -

    Understand how the EFC formula uses your family's taxed income, assets, and household size to calculate need-based aid, with the simplified EFC = Parent Contribution + Student Contribution. A lower EFC means greater financial aid eligibility, so accurate reporting on the FAFSA is critical (Source: U.S. Department of Education).

  3. GLOW: Types of Financial Aid -

    Master the "GLOW" mnemonic - Grants, Loans, Others (like scholarships), and Work-study - to differentiate free gift aid from repayable loans and on-campus work earnings (Source: College Board). For example, Pell Grants don't require repayment, while unsubsidized loans begin accruing interest immediately.

  4. Calculating Cost of Attendance (COA) -

    Break down COA into tuition, fees, room and board, books, transportation, and personal expenses; for instance, COA = $12,000 tuition + $8,000 room/board + $2,000 supplies (Source: NASFAA). Knowing each component helps you compare net costs across schools and plan budgets effectively.

  5. Loan Types and Repayment Tips -

    Differentiate Direct Subsidized loans (interest paused during school) from Unsubsidized loans (interest accrues immediately), and explore income-driven repayment plans like REPAYE for manageable monthly payments (Source: Federal Student Aid). Use the trick "Subsidized = Silence on Interest" to remember who covers the cost while you study.

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