Federal Loans vs Private Loans

What are the two types of federal student loans?

• Short-term and long-term student loans

• Subsidized and unsubsidized student loans

• Public and private student loans

• Government and non-government student loans

Who sets the interest rates for federal student loans?

• The Department of Education

• The President

• Congress

• Banks

What does loan forgiveness mean?

• You can postpone your loan payments indefinitely

• Some portion of your loans may not need to be repaid

• You get a reduction on your interest rate

• You have to apologize for borrowing money

Which jobs might offer loan forgiveness?

• Software engineer

• Nurse, teacher, or Peace Corps worker

• Banker

• Salesperson

What is a major benefit of federal student loans?

• There are no borrowing limits.

• They offer repayment plans based on income

• They have fixed interest rates

• They don't require a good credit score

What is the interest rate type for federal student loans?

• Variable

• Fixed

• Dependent on credit score

• Both fixed and variable

How do you apply for federal student loans?

• Directly with a bank

• Through a credit union

• No application is needed

• Filing a FAFSA

What is a key difference between federal and private student loans regarding interest?

• Private loans always have lower interest rates

• Private loans can have either fixed or variable interest rates

• Federal loans always require a co-signer for interest rates

• Federal loans can have either fixed or variable interest rates

What might you need when applying for a private student loan that you don't need for a federal Direct loan?

• Proof of employment

• A government ID

• A co-signer

• A high school diploma

What is the borrowing limit for undergraduates considered financially dependent on their parents?

• $25,000

• $57,000

• $31,000

• $45,000