#1
Which of the following is NOT a type of financial aid?
Salary
ExplanationSalary is not a form of financial aid; it is earned income.
#2
What is a Parent PLUS loan?
A loan taken out by a parent to help pay for their child's education
ExplanationParent PLUS loans are taken by parents to assist in covering their child's education costs.
#3
What is the difference between a grant and a loan?
A loan needs to be repaid, while a grant does not
ExplanationA grant is free money that doesn't require repayment, while a loan needs to be repaid.
#4
Which of the following is NOT a federal student loan?
Sallie Mae Loan
ExplanationSallie Mae Loan is not a federal student loan; it is a private student loan provider.
#5
What is the Free Application for Federal Student Aid (FAFSA) used for?
All of the above
ExplanationFAFSA is used for various types of federal student aid, including grants, loans, and work-study programs.
#6
What is the main advantage of federal student loans compared to private student loans?
Lower interest rates
ExplanationFederal student loans typically have lower interest rates compared to private student loans.
#7
What is the difference between subsidized and unsubsidized federal student loans?
The government pays the interest on subsidized loans while the borrower is in school
ExplanationSubsidized loans have the government covering interest during the borrower's school period.
#8
What is the maximum amount a dependent undergraduate student can borrow in federal student loans for one academic year (in the United States)?
$9,500
ExplanationDependent undergraduates can borrow up to $9,500 in federal student loans for one academic year.
#9
What is the Expected Family Contribution (EFC) in the context of financial aid?
The amount of money a family is expected to contribute toward their child's education
ExplanationEFC is the expected financial contribution a family should make towards their child's education.
#10
What does the term 'grace period' mean in the context of student loans?
A period after graduation when the borrower is not required to make payments
ExplanationThe grace period is a time after graduation where the borrower is not obligated to make loan payments.
#11
What is the concept of loan consolidation?
Combining multiple loans into a single loan with a single monthly payment
ExplanationLoan consolidation involves merging multiple loans into one, simplifying repayment with a single monthly payment.
#12
Which of the following is a requirement for federal student loan forgiveness under the Public Service Loan Forgiveness (PSLF) program?
Making 10 years of qualifying payments
ExplanationPSLF requires making 10 years of eligible payments for loan forgiveness.
#13
What is the impact of defaulting on a student loan?
Possible wage garnishment
ExplanationDefaulting on a student loan can result in wage garnishment as a consequence.
#14
What is the maximum amount a graduate student can borrow in federal student loans for one academic year?
$20,500
ExplanationGraduate students can borrow up to $20,500 in federal student loans for one academic year.