Student Loans

In order to qualify for Federal student loans…

• You must have financial need
• You must file the FAFSA
• You must complete a separate application for federal loans
• You must take out a private loan

Which of the following statements is TRUE about the advantages of federal student loans compared to private student loans?

• Federal student loans generally offer higher interest rates which remain fixed over the term of the loan
• Federal student loans do not need to be repaid if the borrower runs into financial difficulty and goes bankrupt
• Federal student loans require a credit check
• Federal student loans offer more flexible repayment terms

A subsidized loan is when ____________________ pays the interest while you are in school, while an unsubsidized loan is when ___________________ pays the interest while you are in school.

• the government; parents
• the borrower; parents
• the borrower; the government
• the government; the borrower

Tags

CCSS.RI.11-12.3

CCSS.RI.11-12.5

CCSS.RI.8.5

CCSS.RI.9-10.3

CCSS.RI.9-10.5

Which federal loans are available for parents to take out for their children's education?

• Perkins Loans
• Direct PLUS Loans
• Subsidized Direct Loans
• Unsubsidized Direct Loans

A rule of thumb is a broadly accurate guide or principle. Which statement below represents a rule of thumb for how much a student should borrow for their college education?

• A student should borrow as much as a private lender will allow them to borrow.  
• A student should borrow no more than 35% of their discretionary income upon graduation from college.
• A student should borrow no more than they expect to make as a starting salary upon graduation from college.  
• A student should borrow as much as they expect to earn 10 years after they graduate from college.  

Your friend is talking about stuff she has read online about PRIVATE student loans. Which of the following statements she says is TRUE?

• "You do not need a co-signer for taking out private student loans; you only need a co-signer for taking out federal loans."
• "Private student loans are subsidized."
• "All private student loan lenders offer forbearance and deferment options."
• "Private student loan lenders may require you to make payments toward the loan while you are still in school."

To decrease your total student debt, it is a good idea to do which of the following?

• Take out student loans that amount to more than you expect to earn in the first year after you graduate
• Pay the interest on your loans while you are still in school
• Borrow private loans first
• Take an extra year to graduate (5 years total)

What can you expect to do if you decide to take out student loans?

A) Sign a promissory note

B) Stay in touch with your loan servicer when repayment begins

C) Research your potential starting salary after graduation to make sure you can make your monthly loan payment

D) Take out all loans that are offered to you in your financial award letter

• A & B only

• B & C only

• A, B & C only

• B, C & D only

You enter college with an interest in becoming a teacher. You do some web research and see that the starting salary for high school teachers ranges from $35,000 to $50,000. Based on rules of thumb we analyzed in the lesson, what is a conservative (safer) amount of student debt to take on?

• More than $50,000
• Double your starting salary or $70,000 to $100,000
• About $50,000
• $35,000

You take out a $3,000 UNSUBSIDIZED loan as a freshman with an interest rate of 4% per year. When you graduate four years later, approximately how much will you owe on the loan?

• $3,000
• $3,120
• $3,500
• $12,000