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About This QuizFinancing your education with student loans is a long-term future obligation and should not be done without careful consideration. Many students take on large amounts of debt without being aware of the consequences. Knowing as much as you can about your student loans will help you decide how much debt is reasonable for you. Take this quiz and see how educated you are about managing student loans.
During 2008, what percentage of students in the U.S. took out loans for school?
A total of 66 percent of students in the U.S. borrowed money for college.
What is a grace period?
The time period you do not need to make loan payments.
Loans are in grace for the time you are a student plus a specified time after graduation. During a grace period, you do not need to make loan payments.
The time period when loans do not accrue interest.
The time period over which loans are repaid.
In the U.S., when do unsubsidized Federal Student Loans start accruing interest?
when debt goes into repayment
when the loan is awarded
Unsubsidized Federal Student Loans start accruing interest the moment you take out the loan.
when the grace period ends
When do subsided Federal Student Loans start accruing interest?
when the loan is dispersed
when the loan is paid off
Subsidized loans start accruing interest after graduation.
In the U.S., what is the National Student Loan Data System?
a list of available funds for borrowing
a system that provides information about your debt
The system provides information on your student debt principal and interest amounts.
a list of students in default on their loans.
What is the standard repayment plan?
fixed payment over 10 years
The standard repayment plan is a fixed monthly amount over a 10-year period. It is very important to make all your payments by the due date.
fixed payment over 12 years
fixed payment over 20 years
Is it possible to repay the loan over a longer period than 10 years?
The only payment period is 10 years.
You may pay over 12 to 30 years.
You may select an extended payment plan for between 12 to 30 years. Be aware that additional interest charges from selecting an extended plan will increase the total amount you must repay when compared to the 10-year repayment.
You may pay over 40 years.
If I get a big salary bonus, how much of my student loan may I pay early?
You may pay early up to 20 percent of the loan balance.
You may repay any amount of your student loan early with no penalty.
Usually there is no prepayment penalty, so pay as much as you like as early as you can. Congratulations on doing so well at your job!
You may not pay your loan early.
How do federal loan rates compare to credit card rates?
Federal Student Loan interest rates are usually lower.
Federal Student Loan rates may accrue a lower interest rate than your credit cards. Do not be tempted to pay your higher interest credit card debts instead of your student loans.
Federal Student Loan interest rates are usually the same as credit cards.
Federal Student Loan interest rates are usually higher than credit cards.
What should you do if you cannot pay your student loan?
Apply for forbearance.
Apply for deferment.
If you are having a tough time, find out if you will qualify for a forbearance or deferment. Contact your lender as soon as possible.
How does working as a full-time teacher help repay student loans?
Teachers earn large salaries.
Teachers may qualify for loan forgiveness.
Full-time elementary and secondary school teachers may be eligible for loan forgiveness. There are some stipulations, so you will need to inquire with your school's financial aid office or lender.
Teachers may qualify for grants.
If I go into bankruptcy, what happens to my student loan?
It remains due.
Student loans are not usually discharged by bankruptcy.
It will be decreased.
It will be cancelled.
How can I consolidate my education loans?
Contact the U.S. Department of Education.
Contact your lender.
Consolidating your loans will put all the loans together in one repayment package, making it easier to keep track of different loans from different lenders. The U.S. Department of Education and your lender will help you with consolidation services.
If I consolidate my loans, what will be the interest rate?
your lowest interest rate
your highest interest rate
the average interest rate
Consolidating uses the average interest rate of all the loans.
Can I deduct my student loan payments from my income tax?
You may deduct the total yearly payment.
You may deduct the interest portion only.
That would be wonderful, but only the interest portion of the payment is deductible.
You may deduct the principal portion only.
How does defaulting on a student loan affect my credit rating?
It will cause no change in your credit rating.
It will significantly lower your credit rating for a short time.
It will significantly lower your credit rating for many years.
Defaulting will lower your credit rating significantly for many years.
What is forbearance?
Payments temporarily stop.
Payments temporarily decrease.
Forbearance is a temporary stop of payments or a decrease in the payment amount. To qualify, your debt must be greater than 20 percent of your gross income.
How do you qualify for a loan deferment?
a student in school
unemployed or experiencing an economic hardship
Loans may be deferred while you are in school, if you are unemployed or having an economic hardship. Contact your lender for more information.
What can you do to decrease the amount of student debt you will need for school?
Apply for academic scholarships.
Apply for sports scholarships.
One way to decrease the amount of needed debt is to be awarded college scholarships. Schools offer many academic and sports scholarships to entice top students to attend.
Are there loan forgiveness programs for graduate school debt?
for certain situations
If you are a doctor or lawyer, you may qualify if you work in specific lower-paying positions. Ask your school's financial aid officer.