Your Life on Student Loans!

Types of Loans

100

What type of loan can most people get from a bank? A. Private B. Perkins C. Plus D. Stafford

A. Private loan- Private loans are loans a person can get from a bank or credit union if they meet certain eligibility requirements. A person might not be able to obtain a private loan if they have bad credit, low income or certain health conditions.

200

Which type of loan does the government pay the interest? A. Perkins B. Subsidized C. Unsubsidized D. Plus

B. Subsidized- Subsidized are federal loans in which the government pays the interest. They are much better than unsubsidized loans, which accumulate interest while you're in school.

300

What are the two Stafford loan options? A. Private/Federal B. Perkins/Plus C. Fixed/Variable D. Subsidized/Unsubsidized

D. Subsidized/Unsubsidized- Stafford loans are the most common form of government student loans. These loans are not credit based.

400

The three kinds of federal loans are: A. Private, Stafford, Perkins B. Perkins, Private, Plus C. Plus, Stafford, Private D. Stafford, Perkins, Plus

D. Stafford, Perkins, and Plus. These loans are granted to you by the government, not a private bank. That's why they are called Federal Loans.

500

Which two loans fall under non-need based loans? A. Perkins and Private B. Federal Unsubsidized and Perkin C. Federal Unsubsidized and Federal Parent Plus D. Plus and Subsidized

C. Federal Unsubsidized and Federal Parent Plus. These loans go to students who come from families who are not low income. Need based loans go to students from low income families, who otherwise wouldn't be able to afford college.

Getting Loans

100

You can apply for FAFSA online or by mail. A. True B. False

A. True - You can choose any of these three methods to apply for FAFSA: online, call Federal Aid office, complete PDF form and mail it in.

200

Which of these is not a real loan? A. Plus Loan B. Private Loan C. Perkins Loan D. Long-term Loan

D. Long-term Loan In order to obtain a Perkins Loan you need to fill out FAFSA along with a Perkins Promissory Note, and to receive a Private Loan you can visit different lenders in the community which best suit your needs.

300

Over what percent of 2011-2012 graduates had Parent-Plus Loans A. 23% B. 17% C. 10% D. 12%

B. 17% To get a Parent-Plus Loan you do not need to demonstrate financial aid to qualify. You must have a co-signer. The main benefit is a parent can borrow a federally guaranteed low interest rate loan to pay for their child's education.

400

The Federal deadline for student aid for 2013-2014 in Iowa is... A. April 1, 2014 B. August 1, 2014 C. May 31, 2014 D. June 30, 2014

D. June 30, 2014 You can receive student aid through loans, grants, and/or work study. To qualify for these awards you must apply by June 30, 2014. The U.S. Department of Education awards $150,000,000,000 annually in grants, work study funds, and low interest loans to more than 14 million students.

500

What does SAR stand for? A. Student Aid Report B. Subsidized Aid Report C. Student Ask Report D. Subsidized Academic Report

A. Student Aid Report The SAR summarizes the information provided on the FAFSA, and indicates the Expected Family Contribution. EFC is the amount of money your family will be expected to contribute to your education.

Paying Back Loans

100

In this type of loan the government pays the interest while you are in school. A. Subsidized B. Unsubsidized

A. Subsidized

200

How much time after graduation does a person get before having to pay back their student loan? A. 6 weeks B. 1 year C. 6 months D. 3 months

C. 6 months

300

What type of loan payment is the cheapest in the shortest amount of time? A. Graduated B. Standard C. Extended D. Graduated Extended

B. Standard loan payment is payed back in 10 years with larger monthly payments that remain the same throughout the payment time. Graduated is the second cheapest. It is also payed back in 10 years starting off with lower monthly payments that increase every 2 years. Extended is the third cheapest. It is payed back in 20 years. A lot of interest is accumulated within these years. Graduated Extended is the most expensive. It is payed back in 25 years. A lot of interest is accumulated within these years.

400

The U.S Department of Educatation uses what to handle the billing and other services on loans? A. Loan Servicer B. Loan Consolidation C. Deferment and Forbearance D. Dispute Resolution

A. Loan Servicer A bank hands loans off to loan servicers to control payments.

500

If you take out a $50,000 loan at 6.8% interest rate (assuming the interest rate would not change), how much will you end up paying in total using the Standard Payment ? A. $112,761.91 B. $74,299.46 C. $69,048.28 D. $104,110.82

C. $69,048.28 for the Standard Loan (10 years, same payments) $112,761.91 is for Extended Graduated Loan (25 years) $74,299.46 is for Graduated Loan (10 years, payments increasing every 2 years) $104,110.82 is for Extended Loan (20 years)

Loan Finances

100

When does the 6.8% unsubsidized loan interest start? A. The day you take out the loan. B. The day you graduate. C. Your 21st birthday. D. Five years after you graduate

A. Unsubsidized interest starts the day you take out the loan and compounds every year until the loan is completely paid off.

200

When does the 3.4% subsidized loan interest start? A. The day you take out the loan. B. The day you graduate. C. Ten years after you graduate. D. When the government finally decides to start charging.

B. It starts the day you graduate because the government pays your interest while you are in college, but once you graduate the interest is your responsibility.

300

How much will you have to pay back if you take out an unsubsidized loan of $2,000 per year ($8,000 after four years) with a 6.8% interest rate, if you pay $100 each month starting when you graduate? A. $8,680 B. $9,455 C. $12,693 D. $15,681

C. This is the minimum you will pay if you continuously pay $100 every month after you graduate (10.5 years after college). We figured it out by using the compound interest formula.

400

What is the compound interest formula we used to figure out how much money is owed for each loan? A. A=Pe^rt B. A=P(1+r/n)^nt C. A=L+i^t D. A=P^i(t)

B. A= amount total, P= principal or new number every year, r= rate in decimal form, n= number of times compounded per year, t= time in years or number of years

500

What is the total you would pay, with interest, if you take out $2,000 in unsubsidized loans all four years and $3,500 in subsidized loans all four years ? A.$23,020 B. $27,821 C. 36,739 D. $30,065

D. Adding $12,693+$17,372=$30,065. We used the compound interest formula to figure both numbers out, still paying $100 a month.

Miscellaneous

100

Where is the Financial Aid office at Clarke? A. SAC B. CBH C. Atrium- upstairs D. Counseling and Career Services Office

D. Atrium- upstairs