Everfi Higher Education Test Answer Key
Which of the following statements about federal student loans is TRUE?
A) The interest rate on your loan will be fixed over time.
B) The interest rates on federal loans and private loans are similar.
C) You can only get federal student loans if you demonstrate financial need.
D) You do not accumulate interest on federal loans.
Answer: A) The interest rate on your loan will be fixed over time.
You are looking for ways to pay for your higher education costs. Which of the following options will require you to pay back any money you receive?
A) Grants
B) 529 plans
C) Federal student loans
D) Scholarships
Answer: C) Federal student loans
Which answer best describes an unsubsidized federal loan?
A) You are only responsible for the cost of the loan.
B) You are responsible for paying all the interest that accumulates on your loan.
C) The federal government will only cover the interest accumulated on the loan if you graduate and earn a degree.
D) The federal government will cover the interest accumulated on the loan while you’re in school.
Answer: B) You are responsible for paying all the interest that accumulates on your loan.
Which type of loan requires that you pay the interest accumulated during college?
A) Subsidized federal loan
B) Unsubsidized federal loan
C) Pell Grant
D) University scholarship
Answer: B) Unsubsidized federal loan
Select the answer that best describes why the return on investment (ROI) for higher education is high even though the cost of college is increasing.
A) You have the potential to earn more money in the future when you continue your education past high school.
B) You have the potential to earn less money in the future when you continue your education past college.
C) Higher education is not an investment but a debt.
D) Earning potential is not affected by education level.
Answer: A) You have the potential to earn more money in the future when you continue your education past high school.
Your brother is starting 9th grade next year and is thinking about going to college. What steps would you recommend he take?
A) Meet his guidance counselor.
B) Join a club or sports team.
C) Fill out the FAFSA form.
D) Both A & B
E) Both A & C
Answer: D) Both A & B
After you send in your FAFSA form, what will you receive back?
A) Your Student Aid Report
B) Your IRS Data Retrieval Form
C) A copy of your family’s tax returns
D) A copy of your completed FAFSA form
Answer: A) Your Student Aid Report
The Federal Application for Student Aid (FAFSA) form:
A) Is only used to apply for federal unsubsidized loans.
B) Is only used to apply for federal subsidized loans.
C) Can only be submitted by mail.
D) Is the free application for federal student aid.
Answer: D) Is the free application for federal student aid.
Which of the following statements about the Federal Application for Student Aid (FAFSA) is TRUE?
A) You can only apply online.
B) The earliest you can submit your FAFSA application is December 1st.
C) The IRS Data Retrieval Tool allows you to view and transfer your tax information directly into your FAFSA form.
D) Both A & B are true.
Answer: C) The IRS Data Retrieval Tool allows you to view and transfer your tax information directly into your FAFSA form.
Which education level has the highest return on investment (ROI)?
A) Bachelor’s Degree (4 years of college)
B) High School Diploma
C) Senior in High School
D) ROI is equal for all of the above.
Answer: A) Bachelor’s Degree (4 years of college)
Your sister is starting 9th grade next year and is thinking about going to college. What step would you recommend she take first?
A) Fill out her FAFSA form
B) Start applying for grants & scholarships
C) Look for school clubs & organizations she’s interested in
D) Sign up for college admission exams
Answer: C) Look for school clubs & organizations she’s interested in
Which loan type requires you to make loan payments while you’re attending school?
A) Unsubsidized federal loan
B) Subsidized federal loan
C) Pell Grant
D) None of the above
Answer: D) None of the above
The return on investment (ROI) from education is typically the highest for:
A) A high school graduate
B) A college applicant
C) Someone with a 2-year (Associate) degree
D) Someone with a 4-year (Bachelor’s) degree
Answer: D) Someone with a 4-year (Bachelor’s) degree
The Federal Application for Student Aid (FAFSA) form:
A) must be completed by your guidance counselor
B) can only be filled out by U.S. citizens
C) is used to apply for private loans
D) can be submitted on online or by mail
Answer: D) can be submitted on online or by mail
Which of the following types of financial aid do not require you to pay the money back?
A) Grants
B) Private Loans
C) Federal Loans
D) All of the above.
Answer: A) Grants
When referring to student loans, what is a grace period?
A) The time period between graduating college and starting your first job when you don’t have to pay back student loans
B) The period after graduating or leaving school before you must begin paying back student loans
C) The amount of time you have to pay back your entire student loan amount
D) None of the above
Answer: B) The period after graduating or leaving school before you must begin paying back student loans
Which of the following loans will typically offer the lowest interest rate?
A) Payday loan
B) Federal Student Loan
C) Private Loan
D) Both A & B
Answer: B) Federal Student Loan
On average, someone with a Bachelor’s degree is estimated to earn ____ times more than someone with a high school diploma.
A) 1.2
B) 1.4
C) 1.6
D) 1.8
Answer: C) 1.6
When planning for college, you should consider:
Answer: All of the above
Which education level has the highest return on investment (ROI)?
Answer: Bachelor’s degree (4 years of college)
Your sister is starting 9th grade next year and is thinking about going to college. What step would you recommend she take first?
Answer: Look for school clubs & organizations she’s interested in
Which of the following types of financial aid do not require you to pay the money back?
Answer: Grants
Select the answer that best describes why the return on investment (ROI) for higher education is high even though the cost of college is increasing.
Answer: You have the potential to earn more money in the future when you continue your education past high school.
Which of the following loans will typically offer the lowest interest rate?
Answer:Federal Student Loan
Which answer best describes an unsubsidized federal loan?
Answer:You are responsible for paying all the interest that accumulates on your loan.
On average, someone with a Bachelor’s degree is estimated to earn ____ times more than someone with a high school diploma.
Answer:1.6
The Federal Application for Student Aid (FAFSA) form:
Answer: Is the free application for federal student aid
When referring to student loans, what is a grace period?
Answer: The period after graduating or leaving school before you must begin paying back student loans
1. When making college visits, you may be able to…
receive reimbursement for your college visit costs
schedule a tour of the college campus
attend a college class to see what it’s like
Both B & C
All of the above
Answer: All of the above
2. Which of the following correctly pairs a financing option with its description?
Grants & Scholarships – Money you Earn
Federal Student Loans – Free Money
529 Plan – Money you Save
Federal Work-Study Program – Money you Borrow
Answer: 529 Plan – Money you Save
3. Which of the following statements about the FAFSA process are TRUE?
You must be a U.S. citizen to submit the FAFSA form.
You must use the FAFSA to apply for the federal work-study program.
You cannot fill out the FAFSA form without your parent/guardian.
You should only fill out the FAFSA form if you can demonstrate financial need.
Answer: You must use the FAFSA to apply for the federal work-study program.
4. What is ROI?
Regular Onset Income
Return On Investment
Answer: Return On Investment
5. True or False. Free money. One of the best places to get free money is through grants and scholarships. Since these aren’t loans, you can use them to pay for school expenses like tuition without having to pay anyone back.
True
False
Answer: True
6. True or False. Higher education is a small financial decision.
True
False
Answer: False
7. True or False. Federal work-study program. Through work-study, eligible students can work part-time to help pay for their education while they’re in college. Federal work-study is awarded to students who need financial assistance as part of a federal financial aid package.
True
False
Answer: True
8. True or False. Federal student loans, are offered directly to students by the government. Federal student loan interest rates tend to be HIGHER than other loans, and rates are fixed over time.
True
False
Answer: False
9. Subsidized or Unsubsidized. Which loan type requires you to pay the interest you accumulate during school?
subsideized
unsubsidized
Answer: unsubsidized
10. Subsidized or Unsubsidized. Which loan type is available to everyone?
subsidized
unsubsidized
Answer: unsubsidized
11. Types of Federal Loans are Subsidized or Unsubsidized.
True
False
Answer: True
12. Subsidized or Unsubsidized. Do you have to make payments on federal student loans while you’re in school?
Yes
No
Answer: No
13. When referring to student loans, what is a grace period?
The time period between graduating college and starting your first job when you don’t have to pay back student loans
The period after graduating or leaving school before you must begin paying back student loans
The amount of time you have to pay back your entire student loan amount
None of the above
Answer: The period after graduating or leaving school before you must begin paying back student loans
14. You are looking for ways to pay for your higher education costs. Which of the following options will require you to pay back any money you receive?
Scholarships
529 plans
Federal student loans
Answer: Federal student loans
15. Your sister is starting 9th grade next year and is thinking about going to college. What step would you recommend she take first?
Fill out her FAFSA form
Start applying for grants & scholarships
Look for school clubs & organizations she’s interested in
Sign up for college admission exams
Answer: Look for school clubs & organizations she’s interested in
16. Using the FAFSA form, you can apply for:
Federal student loans
The federal work-study program
Private loans
Both A & B
Answer: Both A & B
17. Which loan type requires you to make loan payments while you’re attending school?
Unsubsidized federal loan
Subsidized federal loan
Pell Grant
None of the above
Answer: None of the above
18. Which of the following loans will typically offer the lowest interest rate?
Payday loan
Federal Student Loan
Private Loan
Both A & B
Answer: Both A & B
19. After you send in your FAFSA form, what will you receive back?
Your Student Aid Report
Your IRS Data Retrieval Form
A copy of your family’s tax returns
A copy of your completed FAFSA form
Answer: A copy of your completed FAFSA form
20. True or False. Most students need to use federal student loans or private student loansto fund their college educations
True
False
Answer: True