The Ultimate Applying for a Student Loan Quiz
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About This Quiz
You have your heart set on going to a top American university, but the cost of the studies is prohibitive. Are you eligible for a student loan? Will it put you into financial obligation forever? Do the figures tally? See whether your figures really tally by taking this financial whiz-quiz.
How do the percentages of Americans who received a college education in 1940 compare with those of today?
It was about 5% in 1940 compared with over 25% today.
It was about 5% in 1940 compared with over 70% today.
In 1940, the percentages of college-going Americans stood at 5%; today, that figure stands at over 70%.
It was about 50% in 1940 compared with over 85% today.
When were the Perkins and Stafford loans established?
the Perkins loan in 1948 and the Stafford loan in 1955
the Perkins loan in 1955 and the Stafford loan in 1960
the Perkins loan in 1958 and the Stafford loan in 1965
The Perkins loan was established following the National Defense Education Act in 1958, whereas the Stafford loan was established following the Higher Education Act in 1965.
Many middle- and upper-income students do not apply for student loans. Why?
because they're too proud
because they think they won't qualify
Students from the upper end of the social spectrum often don't apply, because they think (mistakenly) that they won't qualify.
because they don't need to
What are the general criteria for an "independent" student?
over 24, married, an armed forces veteran or have dependent children
To be considered "independent," you need to be over 24, married, an armed forces veteran or to have dependent children.
over 26, have worked before or have a previous college degree
over 28, don't live with your parents and have previously taken a bank loan
Who would be the best person to help you with your student loan?
the student senate of your college
the financial aid administrator of your college
The financial aid administrator of your college would be the best man for the job.
To qualify for a student loan, you must take appropriate classes in an accredited school. Which of these classes would probably qualify?
calligraphy and quill cutting
Some classes might disqualify you for a loan, such as classes not catered towards your degree. Chances are, English literature would indeed be appropriate.
What is the difference between Federal Family Education Loans (FFEL) and Direct Loans?
FFEL loans - through a lender; Direct Loans - through the Department of Education
FFEL loans are processed via a lender while Direct Loans are via the Department of Education.
FFEL loans - through the Department of Education; Direct Loans - through a lender
FFEL loans - for undergraduates only; Direct Loans - for under- and post-graduate students
Who pays your interest for subsidized loans while you are in college?
The government foots the bill for subsidized loans while you are in college.
What is the advantage in taking a student loan from a bank or credit card company?
They offer low interest rates, bigger loans and don't require financial history.
There are usually low interest rates and no repayment obligation if you're studying at least part time.
Taking a student loan from a bank or credit card company usually means you'll have low interest rates and no repayment obligation while you're still studying.
You can repay the loan over the first 20 years at no interest. After that, it's 2% interest annually.
What does FAFSA stand for?
Free Aid for Federal Student Applications
Federal Application for Foreign Student Assistance
Free Application for Federal Student Aid
FAFSA stands for Free Application for Federal Student Aid.
What is usually the earliest possible time to lodge a student loan application?
The earliest possible time is usually January. Most colleges will accept applications from then until June 30.
When are most first payments expected to be made?
one week after graduation
three months after graduation
six months after graduation
The majority of loans require first payments to be made six months after graduation, whether or not the student has found work.
What was the interest rate for an unsubsidized Stafford Loan for the 2008-2009 academic year?
For that academic year, the unsubsidized Stafford Loan had a 6.8 percent interest rate.
What is the very first stage of applying for a student loan?
securing a personal identification number (PIN)
To jump-start the whole process, you first need a personal identification number (PIN).
downloading forms from the FAFSA site
calculating your assets and student expenses
Do you have to apply for FAFSA online?
No. You could also apply by phone.
No, postal mail is possible but it's slower.
You can either apply online (the quicker route) or by snail mail.
On your Student Aid Report, there is an Expected Family Contribution (EFC) number. What does this indicate?
the number of repayments you'll make over a 20-year loan
the figure, in dollars, of your family's financial obligation to repay the loan
your eligibility in terms of the type and amount of financial assistance
The EFC number refers to your eligibility in terms of the type and amount of financial assistance.
Each student has a specific aid package tailor-made to suit him. What factors determine this?
your college reputation, financial situation and expected length of study
your state of residence, financial possibilities and career of choice
your grade level, financial needs for attending that college and other pertinent financial information
Your tailor-made aid package is usually determined by your grade level, cost of college studies and other pertinent financial details.
What is the promissory note for?
It specifies the loan details, such as interest rates and repayment terms.
The promissory note is basically your green light to the loan. It is your signed document specifying your loan details and repayment terms.
It provides loan offers from various sources.
It lists different loan packages, with their individual interest rates and terms of repayment.
What are the U.S. Department of Education statistics regarding loan defaults?
Loan defaults are rare in most universities.
Approximately 25 percent of borrowers default on their loans.
The statistics aren't as bad as they might have been, but they're not great either. It seems that around 25 percent of student loan borrowers default on their loans.
A shocking 45 percent of borrowers default on their loans.
What are the legal ramifications of a student loan?
They are not legally binding but the college can withhold or withdraw your accreditation if you don't pay.
They are binding but cannot be pursued in a court of law.
They are legally binding.
Legally speaking, a student loan is as legally binding as a home mortgage or car loan. Don't pay and you risk being hauled into court.
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