FINANCIAL LITERACY: Savings, Grants, and Scholarships

Vocabulary
college, grant, monetary award, scholarship
Key Concept
TEKS 6(1)(A), 6(1)(D), 6(14)(G)
There are different ways to pay for college.
Your savings is money you put away to use at a later time. One way you can save is to open a
savings account at a bank. Depending on the type of account you open, you may earn interest on
your money.
Grants and scholarships award money to a student so the student can pursue an education. Grants
and scholarships provide money that the student does not need to repay.
Reasons Grants or Scholarships are Given
Academic performance

Financial need

Athletic performance

Subject major being pursued

Some grants and scholarships are renewable from year to year. A student might need to continue to
meet certain conditions for a grant or scholarship to renew.
Part 1
TEKS 6(1)(A), 6(14)(G)
Example Identifying Types of College Funding
What type of college funding is described below, grants and scholarships or savings? Explain.
Your grandparent deposited $50 each month into a bank account. Your grandparent plans to use the
money in the account to help you pay for college.
Solution
Savings; money deposited and kept in the bank is savings.
Part 2
TEKS 6(1)(A), 6(4)(G), 6(5)(B)
Example Finding Percents of College Costs Covered
The cost of one year at a certain college is $55,000. The college gives you a scholarship of $11,000.

Decide if the statement is true or false. If the statement is false, explain why.
a. The scholarship covers 80% of the cost of one year.
b. You also receive a grant for $10,000. Now more than 50% of the cost of one year is covered.
c. Suppose you can match the $11,000 scholarship with your own savings. Then you will have
exactly 40% of the cost of one year covered.
Solution
a. False; $11,000/$55,000 = 0.2 = 20%. So 20% of the cost of one year is covered by the scholarship.
b. False; the grant and the scholarship total $21,000. That is less than half of $55,000.
c. False; the grant, scholarship, and your savings total $32,000.
$32,000/$55,000 0.5818 = 58.18%

About 58% of the costs for one year are covered.

Part 3
TEKS 6(1)(A), 6(2)(D), 6(14)(G)
Example Comparing College Costs and Funding
You are choosing between the two colleges shown. You are planning to pay for the rest of the cost of
the first year with your savings. Which school will you need to use more of your savings to attend?
Explain.

Solution
Find how much of Rockside University's costs are left to cover.
$50,000 $11,000 $4,500 = $34,500
You will need to use $34,500 from your savings to attend Rockside University.
Find how much of Wrighey University's costs are left to cover.
$48,000 $4,000 $3,000 = $41,000
You will need to use $41,000 from your savings to attend Wrighey University.
You will need to use more money from your savings to attend Wrighey University.