Practice Test GeeksFiCEP - Financial Counseling Certification Program Practice Test
← All FICEP Flashcard Decks

Student Loan Counseling Flashcards

7 cards from real FICEP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Student Loan Counseling flashcards as text

  1. What is the primary difference between subsidized and unsubsidized federal Direct Loans?

    Answer: The federal government pays interest on subsidized loans while the borrower is enrolled at least half-time

    With subsidized Direct Loans, the U.S. Department of Education pays the interest during in-school, grace, and deferment periods, reducing the total cost to the borrower.

  2. Which federal student loan is available to graduate students and parents of dependent undergraduates to help cover the full cost of attendance?

    Answer: Direct PLUS Loan

    Direct PLUS Loans are available to graduate/professional students (Grad PLUS) and parents of dependent undergrads (Parent PLUS), and can cover up to the cost of attendance minus other financial aid.

  3. What is the standard repayment period for federal Direct Student Loans?

    Answer: 10 years

    The Standard Repayment Plan sets fixed monthly payments over 10 years, which typically results in the least interest paid over the life of the loan.

  4. During an approved deferment period on federal student loans, which statement is accurate regarding interest?

    Answer: Interest does not accrue on subsidized loans but continues to accrue on unsubsidized loans

    During deferment, the government covers interest on subsidized loans, but interest continues to accrue on unsubsidized and PLUS loans, potentially capitalizing at the end of the period.

  5. What is the annual Direct Loan borrowing limit for a dependent undergraduate student in their first year of college?

    Answer: $5,500

    First-year dependent undergraduates may borrow up to $5,500 per year in Direct Loans, with no more than $3,500 of that amount in subsidized loans.

  6. Which entity owns and services loans made through the federal Direct Loan program?

    Answer: The U.S. Department of Education

    Under the Direct Loan program, the U.S. Department of Education is the lender; third-party servicers collect payments on its behalf, but the government retains ownership of the debt.

  7. In student loan terminology, what does 'capitalization' mean?

    Answer: The addition of accrued, unpaid interest to the principal loan balance

    Capitalization occurs when unpaid interest is added to the principal balance, increasing the total amount owed and causing future interest to accrue on a larger balance.