Loans Student Loans 2

Question 1

What is the Public Service Loan Forgiveness (PSLF) program?

Accepted Answer

Forgiveness of remaining federal loan balance after 120 qualifying payments while working for a qualifying public employer

Answer

PSLF forgives the remaining balance on Direct Loans after the borrower makes 120 qualifying payments while employed full-time by a qualifying public or non-profit employer.

Question 2

Which of the following is NOT an income-driven repayment (IDR) plan for federal student loans?

Accepted Answer

Graduated Extended Repayment (GER)

Answer

Graduated Extended Repayment (GER) is not a federal IDR plan; the four IDR plans are IBR, ICR, PAYE, and SAVE.

Question 3

What is the annual borrowing limit for a first-year dependent undergraduate student under the federal Direct Loan program?

Accepted Answer

$5,500

Answer

First-year dependent undergraduates can borrow up to $5,500 in Direct Loans, of which no more than $3,500 may be subsidized.

Question 4

Student loan deferment allows borrowers to:

Accepted Answer

Temporarily postpone payments, though interest may still accrue

Answer

Deferment temporarily pauses required loan payments; however, interest typically continues to accrue on unsubsidized and PLUS loans during deferment.

Question 5

What is the primary risk of refinancing federal student loans with a private lender?

Accepted Answer

The borrower loses access to federal protections like IDR plans and PSLF

Answer

Refinancing federal loans into a private loan means forfeiting all federal borrower protections, including income-driven repayment options and forgiveness programs.

Loans Practice Test

Loans Practice Test

Loans Student Loans 2