Understanding Student Loans Quiz

The Department of Education is responsible for overseeing student loans in the United States.

Federal student loans typically have a grace period of 6 months after graduation before repayment begins.

Federal subsidized student loans have a 0% interest rate, meaning no interest accrues while the borrower is in school and during grace periods.

The FAFSA is used to determine a student's eligibility for financial aid, including federal student loans.

Private student loans allow for the accumulation of interest, which is added to the principal amount.

The maximum annual limit for federal subsidized loans for undergraduate students is $7,500.

The process of combining multiple federal student loans into a single loan with a single monthly payment is called loan consolidation.

Unlike unsubsidized loans, interest on subsidized federal student loans is paid by the government during certain periods, such as while the borrower is in school and during grace periods.

The Pay As You Earn (PAYE) Plan offers loan forgiveness after 20 years of qualifying payments.

The aggregate loan limit for subsidized and unsubsidized federal loans for undergraduate students is $57,500.

Public Service Loan Forgiveness (PSLF) is specifically designed for public service workers to forgive their federal student loans after 120 qualifying payments.

Most private student loans require a minimum credit score of 700.