WorksheetsCompare Federal and Private Loans
Total questions: 12
Worksheet time: 6mins
According to the infographic comparing federal and private student loans, when do federal student loans typically require you to start repayment?
After you graduate, leave school, or drop below half-time enrollment
Immediately when the loan is disbursed
While you are still in school regardless of enrollment status
After your first year of college
Which statement about private student loan interest rates is emphasized in the infographic?
They are always fixed and lower than federal rates
They can be variable, with some rates greater than 18%
They are fixed but typically higher than credit card rates
They are capped at 10% by federal law
What does the infographic indicate about subsidized loans?
Federal undergraduate borrowers with financial need may receive subsidized loans where the government pays in-school interest
Only private loans offer subsidized interest during school
Subsidized loans are available only to graduate students
Subsidized loans mean the lender forgives your principal after graduation
What does the infographic say about credit checks for most federal student loans (excluding PLUS loans)?
A full credit check is required for all federal loans
No credit check is needed for most federal loans, which can help establish a good credit record
Credit checks are optional but usually performed for federal loans
Federal loans require a minimum credit score of 700
What does the infographic state about the need for a cosigner?
Federal loans generally require a cosigner
Federal loans rarely allow cosigners
You will not need a cosigner for a federal student loan in most cases, while you may need one for a private loan
Private loans never allow cosigners
What tax-related difference between federal and private student loans is highlighted in the infographic?
Interest on federal loans is never tax deductible
Interest on private loans is always tax deductible
Interest on federal loans may be tax deductible, while interest on private loans may not be
Interest on both federal and private loans is always tax deductible
What repayment relief option does the infographic associate with federal student loans?
Mandatory deferment is offered by all private lenders
Temporary postponement or lowering of payments through forbearance or deferment
Only consolidation is available
No relief options are available
According to the infographic, how do repayment plans differ between federal and private student loans?
Federal loans have only one standard plan
Federal loans offer several repayment plans, including options tied to income, while private borrowers must check with their lender for available plans
Private loans guarantee income-driven repayment plans
Private loans have more repayment plans than federal loans
What does the infographic indicate about prepayment penalty fees?
Federal loans charge a fee if you repay early
Private loans are prohibited from charging prepayment penalties
Federal loans have no prepayment penalty fee, while private borrowers must ensure their loan has none
Both federal and private loans always charge prepayment penalties
Which statement about loan forgiveness in the infographic is accurate?
Federal borrowers may be eligible for loan forgiveness, such as when working in public service
Private lenders often offer loan forgiveness programs
Loan forgiveness automatically applies after 10 years for all loans
Loan forgiveness only applies to interest, not principal
Who can students contact for free help with federal student loans versus assistance with private student loan concerns, according to the infographic?
Federal: 1-800-4-FED-AID and StudentAid.gov; Private: Consumer Financial Protection Bureau’s private student loan ombudsman
Federal: local bank; Private: university bursar
Federal: IRS; Private: state attorney general
Federal: Department of Labor; Private: Federal Reserve
Match each loan topic to the correct description from the infographic.
Subsidized loans
Federal undergraduate borrowers with financial need may have in-school interest paid by the government; private loans are not subsidized
Cosigner
You won’t need one for a federal loan in most cases; you may need one for a private loan
Loan forgiveness
Federal loans may offer forgiveness (e.g., public service); private lenders are unlikely to offer it
Prepayment penalties
Federal loans have no prepayment penalty; private borrowers should ensure their loan has none
