Loans Student Loans

Question 1

What is the main difference between subsidized and unsubsidized federal student loans?

Accepted Answer

The government pays interest on subsidized loans while the student is in school

Answer

Subsidized loans have higher limits

Answer

Unsubsidized loans are only for graduate students

Answer

Subsidized loans do not require repayment

Question 2

Which federal form must students complete to apply for federal student aid, including loans?

Accepted Answer

FAFSA

Answer

CSS Profile

Answer

IRS Form 1040

Answer

SAR Application

Question 3

What is the standard repayment plan term for federal Direct Loans?

Accepted Answer

10 years

Answer

5 years

Answer

20 years

Answer

30 years

Question 4

Which type of student loan is based primarily on financial need as determined by the FAFSA?

Accepted Answer

Direct Subsidized Loan

Answer

Direct PLUS Loan

Answer

Direct Unsubsidized Loan

Answer

Private student loan

Question 5

What does 'loan capitalization' mean in the context of student loans?

Accepted Answer

Adding unpaid accrued interest to the principal balance

Answer

Converting a private loan to a federal loan

Answer

Paying off the loan in a lump sum

Answer

Reducing the interest rate after 12 on-time payments

Question 6

Under which federal income-driven repayment plan are payments capped at 10% of discretionary income for new borrowers?

Accepted Answer

Pay As You Earn (PAYE)

Answer

Graduated Repayment Plan

Answer

Income-Based Repayment (IBR)

Answer

Extended Repayment Plan