6.3 Financial Aid and Student Loans

All of the following are true, EXCEPT:

• a fee required to submit the FAFSA form

• parent information, such as income and assets, may be required when completing the FAFSA

• the FAFSA can be completed online or submitted by mail

• income tax return documents are necessary when completing the FAFSA

Which of the following statements is TRUE?

• students receiving financial aid awards may only qualify for one type of federal financial aid

• students receiving financial aid wards may qualify for all three types of federal financial aid and also receive additional financial aid awards from the state or school

• financial aid applications are due before the school year starts and cannot be submitted after the start date

• all of the answer choices are true

Federal student loans offer which of the following advantages?

I. No credit check

II. Lower interest rate

III. Flexible loan repayment

• I only

• I and III only

• II and III only

• I, II, and III

Which of the following forms of federal financial aid must be repaid once the student is out of school for 6 months?

• work-study awards

• grants

• direct subsidized loans

• none of the answer choices are correct

Who is eligible for a federal subsidized loan?

• any student with financial need

• undergraduate students with financial need

• parents of an undergraduate student

• both undergraduate students with a financial need and their parents

All of the following statements regarding federal student loans are true, EXCEPT:

• there is no credit report/score check when applying for federal student loans

• federal student loans offer more flexible repayment options compared to private student loans

• federal student loans have loan forgiveness programs for those working in public service jobs, and those who have made on-time payments for 10 years

• private student loans generally have lower interest rates compared to federal student loans

Which of the following types of federal student loans does not accrue interest while the student is enrolled in school (i.e., the federal government pays the interest during that time)?

• direct subsidized loan

• direct unsubsidized loan

• direct PLUS loan

• direct consolidation loan

Which of the following types of federal student loans does accrue interest while the student is enrolled in school (i.e., the federal government pays the interest during that time)?

• direct subsidized loan

• direct unsubsidized loan

• direct PLUS loan

• both unsubsidized and PLUS loans

All of the following are benefits of direct consolidation loans, EXCEPT:

• only one monthly payment is required

• consolidated loans have a fixed interest rate

• consolidated loans can be discharged in bankruptcy

• all of the answer choices are benefits of direct consolidation loans

Aside from not taking out student loans, the best way to minimize the amount of interest paid on student loans is to:

• repay them as quickly as possible

• consolidate loans

• limit borrowing to direct subsidized loans

• both repay them as quickly as possible and limit borrowing to subsidized loans