CCC Student Loan Counseling & Education Debt 2

Question 1

Under the Public Service Loan Forgiveness (PSLF) program, how many qualifying payments must a borrower make before their remaining balance is forgiven?

Accepted Answer

120 payments

Answer

PSLF requires 120 qualifying monthly payments (equivalent to 10 years) while working full-time for a qualifying employer before forgiveness is granted.

Question 2

Which income-driven repayment plan, available only to borrowers who are new borrowers as of October 1, 2007 with new loans as of October 1, 2011, caps payments at 10% of discretionary income?

Accepted Answer

Pay As You Earn (PAYE)

Answer

Pay As You Earn (PAYE) caps payments at 10% of discretionary income and requires borrowers to be new borrowers meeting specific eligibility criteria.

Question 3

For new IBR borrowers who first borrowed on or after July 1, 2014, what percentage of discretionary income is the monthly payment capped at?

Accepted Answer

10%

Answer

New IBR borrowers (first loan on or after July 1, 2014) have payments capped at 10% of discretionary income, compared to 15% for older IBR borrowers.

Question 4

How is 'discretionary income' defined for purposes of federal income-driven repayment plan calculations?

Accepted Answer

Adjusted gross income minus 150% of the federal poverty guideline for the borrower's family size and state

Answer

For most IDR plans, discretionary income is defined as the borrower's AGI minus 150% of the federal poverty guideline for their family size and state of residence.

Question 5

A borrower with only Parent PLUS Loans wishes to enroll in an income-driven repayment plan. What must they do first?

Accepted Answer

Consolidate the Parent PLUS Loans into a Direct Consolidation Loan to access Income-Contingent Repayment (ICR)

Answer

Parent PLUS Loans are excluded from most IDR plans; however, if consolidated into a Direct Consolidation Loan, the resulting loan becomes eligible for Income-Contingent Repayment (ICR).

CCC Practice Test

CCC Practice Test

CCC Student Loan Counseling & Education Debt 2