#1
Which of the following is a common type of student loan?
Federal student loan
ExplanationCommonly offered by government for educational purposes.
#2
What is the grace period on most student loans?
6 months
ExplanationTypically a six-month period after leaving school.
#3
What is the difference between a fixed interest rate and a variable interest rate on a student loan?
A fixed interest rate stays the same, while a variable interest rate can change over time
ExplanationStable vs. fluctuating interest charges.
#4
What is the difference between a grant and a loan?
A grant is free money that does not need to be repaid, while a loan is borrowed money that must be repaid with interest
ExplanationGift vs. borrowed funds with interest.
#5
What is the difference between a federal student loan and a private student loan?
Federal student loans are funded by the government, while private student loans are funded by banks, credit unions, and other private lenders
ExplanationSource of funds differs, government vs. private entities.
#6
What is the FAFSA?
A financial aid application
ExplanationApplication form for seeking financial assistance for education.
#7
Which of the following is true about interest on student loans?
Interest rates on federal student loans are fixed
ExplanationInterest rates remain constant over the loan's term.
#8
Which of the following is NOT a way to pay off student loans faster?
Refinancing to a longer loan term
ExplanationExtending the loan term delays repayment.
#9
What is the difference between subsidized and unsubsidized federal student loans?
Interest on subsidized loans is paid by the government while the student is in school
ExplanationGovernment covers interest during schooling for subsidized loans.
#10
Which of the following is a consequence of defaulting on a student loan?
Loss of eligibility for federal student aid
ExplanationImpacts eligibility for future financial aid.
#11
What is loan forbearance?
A period during which you can temporarily stop making loan payments
ExplanationAllows temporary suspension of loan payments.
#12
What is the difference between loan consolidation and refinancing?
Consolidation combines multiple loans into one, while refinancing replaces a loan with a new one
ExplanationCombining vs. replacing existing loans with new terms.
#13
What is the Public Service Loan Forgiveness (PSLF) program?
A program that forgives student loans for borrowers who work in certain public service jobs
ExplanationDebt forgiveness for public service employees.
#14
How does defaulting on a student loan affect your credit score?
It lowers your credit score
ExplanationDefaults negatively impact creditworthiness.
#15
What is the 50/30/20 rule in budgeting?
A rule that states you should spend 50% of your income on needs, 30% on wants, and 20% on savings and debt repayment
ExplanationAllocation guideline for income distribution.