Educator Toolbox

TXGU Activity: Diving into Financial Aid


Created By:
 Texas GEAR UP

Grade Level: 7th/8th

Introduction for Educators: Let's face it: No matter how prepared they are, many of your students will have to take out some loans to pay for college. If they don't repay them on time, interest will accrue. If they don't begin to pay their bills soon, costs can spin out of control.

If you can help them understand how loans work now, you can save them thousands of dollars and years of heartbreak.

Introduction for Students: Have you ever checked a book out of the library and forgotten to return it? At first, it was a nice experience. You got to enjoy a book at no cost. Then you go back to the library a few weeks after your return date. Because you waited too long, you now have to pay a fine. That’s not so nice.

College loans aren't free. The longer you wait to pay them, the more complicated repayment will become.

The Activity: Ask your students if they’ve ever wondered if their math classes will help them when they grow up. They certainly will if they have to take out college loans.

Explain that a college loan isn’t free money. A bank "loans" you an amount of money, and then expects you to pay it back—with interest. Interest is extra money they charge for every month that someone doesn’t pay.

Have students work with their parents, teachers, and friends to learn the terms below. Once they have a good understanding of what each term means, have them write a one-sentence definition in their own words.

  • Principal
  • Annual Interest Rate
  • Amortization Table

Use the following websites to help in their research:


Loans may help people go to college, but they have to be repaid. And the sooner they’re paid back, the better!

Bonus Features: April 15 is Tax Day. Ask your students if they know that the U.S. government takes out loans, too. During World War I, the government sold "war bonds," which were small loans that were used to help pay for the war.