Types of Credit - Student Loans

What is a student loan?

• A student loan is a type of loan that is given to students as a reward for good grades.

• A student loan is a type of loan designed to help students pay for their daily expenses.

• A student loan is a type of loan designed to help students pay for post-secondary education.

• A student loan is a type of loan that is only available to graduate students.

What are the different types of student loans?

• federal student loans, private student loans, and parent PLUS loans

• federal loans, state loans, and institutional loans

• scholarship loans, grant loans, and work-study loans

• subsidized student loans, unsubsidized student loans, and Perkins loans

What is the difference between subsidized and unsubsidized student loans?

• Subsidized student loans have a higher interest rate than unsubsidized student loans.

• Subsidized student loans are based on financial need and the government pays the interest while the borrower is in school. Unsubsidized student loans are not based on financial need and the borrower is responsible for paying all interest.

• Subsidized student loans are only available to graduate students while unsubsidized student loans are only available to undergraduate students.

• Subsidized student loans are not based on financial need and the government pays the interest while the borrower is in school. Unsubsidized student loans are based on financial need and the borrower is responsible for paying all interest.

How does the interest rate on student loans work?

• The interest rate on student loans is the same for all borrowers regardless of their credit history.

• The interest rate on student loans is determined by several factors, including the type of loan, the borrower's credit history, and the current market rates.

• The interest rate on student loans is determined solely by the borrower's income.

• The interest rate on student loans is fixed and does not change over time.

What is the maximum amount of money you can borrow through a federal student loan?

• $1,000 to $5,000 per year

• $10,000 to $15,000 per year

• $20,000 to $25,000 per year

• $5,500 to $12,500 per year

What is the Free Application for Federal Student Aid (FAFSA)?

• A scholarship program for high school students.

• A form to apply for financial aid for college or graduate school.

• A loan program for purchasing a car.

• A tax form for reporting income.

What is the repayment period for student loans?

• 10 to 30 years

• 6 to 12 months

• 20 to 50 years

• 1 to 5 years

Can student loans be forgiven or discharged?

• No

• Sometimes

• Yes

• Only in certain cases

What happens if you default on your student loans?

• Defaulting on your student loans can have serious consequences, including damage to your credit score, wage garnishment, and legal action.

• Defaulting on your student loans has no consequences.

• Defaulting on your student loans will result in a lower interest rate.

• Defaulting on your student loans will make it easier to get approved for future loans.

Are student loans considered good debt or bad debt?

• neither good nor bad debt

• good debt

• bad debt

• it depends on the interest rate