Warm Up: Student Loans, Part 1

What is the difference between a subsidized and an unsubsidized student loan?

• The interest on a subsidized loan is paid for by the federal government while you're still in school while the interest on an unsubsidized loan grows while you're in school.

• The interest on an unsubsidized loan is paid for by the federal government while you're still in school while the interest on a subsidized loan grows while you're in school.

• Unsubsidized loans are always through banks while subsidized loans are the only loans offered by the government.

• Subsidized loans can only be taken out by parents.

In what year of college can you borrow the most money in a federal student loan?

• When you are in graduate school

• Freshman year (Year 1)

• Sophomore year (Year 2)

• Junior year (Year 3)

When you take out a student loan, who gets paid the money?

• Your college gets the money directly.

• You get a check that you can deposit and then pay your college with.

• Your parents.

• Your college advisor

Which of these is a good strategy when taking out student loans?

• Only borrow what you actually really need to.

• Take out as much money as possible so that you don't have to stress about money while in school.

• Only borrow money from banks instead of the government.

• Take out a lot of loans and then declare bankruptcy so that you don't have to pay them back.

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If you find that you can't afford your student loan payments when it's time to start paying them back, what is the best option?

• Talk to your lender to ask about lower payment options.

• Ignore your loans.

• Move to another country where they can't find you.

• Give back your diploma.

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