Student loans Solved quiz

Borrowing to pay for a cikkege education is a legitimate use of credit.

True

 

The standard repayment plan amortizes student loans over a 20-year period.

True

False

 

False, 10-year period



 

 

The student loans with the best loan terms are the Stafford and Perkins loans

True

False

 

 

About 25% of all student loans have a past due balance.

True

False

 

 

The most common type of grant is the Federal Supplemental Education Opportunity Grant.

True

False

 

False, Pell Grant

 

 

Loan forgiveness is the option to have all or a portion of your student loan forgiven under certain types of volunteer work, public or military service.

True

False

 

 

Loan repayment of a PLUS loan begins within 60 days of loan disbursement.

 

True

 

 

The interest on a student loan is not tax deductible.

True

False

 

False, loan interest is deductible

 

 

529 plans are best suited for a child with several years left before going to college

True

False

 

 

The recent average annual cost of a college education at a private college is under $30,000.

True

False

 

False, over $40,000

 

 

Students borrowing to pay for college should base the amount borrowed on current income.

True

False

 

False, future income

 

 

Private lenders of student loans are more flexible than public lenders in providing financial relief when borrowers are under pressure.

True

False

 

False, public and government lenders offer more flexible options

 

 

In order to qualify for a Stafford loan, you must

a. Demonstrate a financial need

b. Have a good credit rating

c. Make satisfactory academic progress

d. All of the above

e. a and c only

 

Ans: e. a and c only

 

 

In order to qualify for a Perkins loan, you must

1. Demonstrate financial need

   b. Visit the financial institution

   c. Apply through your parents

   d. All of the above

   e. a and c only

 

 

Regarding student loans, which of the following is not true?

1. They are available only for undergraduate students

   b. There is a limit on how much can be borrowed with each loan

   c. Parents (or legal guardians) must cosign

   d. Interest does not have to be repaid

   e. There is a limit on the number of loans one can have

 

 

1. There is a limit on how much can be borrowed with each loan

 

 

Which of the following loans do not have to be repaid until after you graduate from college?

1. Stafford and Perkins

   b. Stafford and Plus

   c. Perkins and PLUS

   d. Only Stafford

   e. Only Perkins

 

 

The average graduating senior leaves school with about how much in debt?

1. $10,000

   b. $15,000

   c. $30,000

   d. $40,000

   e. $50,000

 

 

Which type of educational loan most likely carries the highest interest charges?

1. Stafford Loan

   b. PLUS loan

   c. Perkins Loan

   d. 529 loan

   e. Corverdell loan

 

 

Which of the following statements are correct?

1. Student loans are not total more than $1.11 Trillion

   b. Student loans are dischargeable in Chapter 7 bankruptcy proceedings

   c. In order to continue receiving student loans, a student must be making satisfactory progress in their academic program

   d. All of the above are correct

   e. a and c only

 

 

Which of the following are student loan payment options?

1. Standard repayment plan

   b. Graduated repayment plan

   c. Income-based repayment plan

   d. Extended repayment plan

   e. All of the above are student loan payment options

 

 

standard repayment plan

 

 

Time borrower has to repay: Up to 10 years. (10- to 30-year repayment period for Direct Consolidation Loans) Payments remain constant throughout the repayment period. Borrower will pay less interest for the loan over time under this plan than he or she would under the other plans. The loan will be paid in full by the end of the repayment period.

 

 

Stafford Loan

 

One of the most common types of federal student loan, awarded based on limits that are set for any individual loan as well as on financial need, both subsidized and unsubsidized offerings.

 

 

Perkins Loan

 

Another common federal student loan. These loans have a set 5% interest rate and a 10 year repayment period.

 

 

529 plan

 

A savings plan operated by a state or educational institution designed to help families set aside funds for future college costs

 

 

PLUS Loan

 

A loan available to graduate students and parents of dependent undergraduate students for which the borrower is fully responsible for paying the interest regardless of the loan status.

 

loan forgiveness

 

a program in which a borrower’s loans are paid off
in exchange for paid work under conditions (duration, location, job description, etc) set by the institution that sponsored the loan

 

 

Graduated Repayment Plan

 

Time borrower has to repay: Up to 10 years. (10- to 30-year repayment period for Direct Consolidation Loans) Payments start low and gradually increase every two years over life of loan. The loan will be paid in full by the end of the repayment period.

 

 

Coverdell Education Savings Account

 

 

an investment account through which individuals can save for education expenses on a tax-exempt basis

 

 

Income Based Repayment Plan

 

 

A federal student loan repayment option beginning July 1, 2009 that caps monthly payments based on income and family size, and forgives remaining debt and interest after 25 years.

 

 

Extended Repayment Plan

 

allows you to repay loans for a longer period of time with lower monthly rates but greater interest