Student Loans & Repayment Plans
Which of the following is a federal student loan repayment plan?
A) Interest-Only Repayment
B) Income-Driven Repayment (IDR)
C) Fixed Principal Repayment
D) Private Loan Consolidation
B) Income-Driven Repayment (IDR)
What is the most important factor in determining your credit score?
A) Length of credit history
B) Payment history
C) Types of credit used
D) Number of credit inquiries
B) Payment history
What percentage of your monthly income should generally go toward housing costs?
A) 10%
B) 30%
C) 50%
D) 70%
B) 30%
Which type of loan is most commonly used to finance dental school?
A) Auto loan
B) Federal student loan
C) Personal line of credit
D) Payday loan
B) Federal student loan
What is the best way to build an emergency fund?
A) Invest in high-risk stocks
B) Save at least 3-6 months' worth of living expenses
C) Pay only the minimum balance on credit cards
D) Rely on short-term payday loans
B) Save at least 3-6 months' worth of living expenses
What is the standard repayment term for federal student loans if no other plan is selected?
10 years
A higher credit score generally results in:
A) Higher interest rates
B) Lower interest rates
C) More debt
D) Fewer loan options
B) Lower interest rates
What does debt-to-income (DTI) ratio measure?
A) The total amount of debt you owe
B) The percentage of your income that goes toward debt payments
C) Your annual salary compared to expenses
D) Your credit card utilization rate
B) The percentage of your income that goes toward debt payments
What is the main disadvantage of carrying a high credit card balance?
A) Lower interest rates on future loans
B) Increased credit score
C) Higher interest payments and potential credit score damage
D) No impact if you make the minimum payment
C) Higher interest payments and potential credit score damage
Which repayment plan allows borrowers to have their remaining balance forgiven after 20-25 years of payments?
A) Graduated Repayment Plan
B) Income-Based Repayment (IBR)
C) Standard Repayment Plan
D) Pay As You Earn (PAYE)
D) Pay As You Earn (PAYE)
What is the typical range of FICO credit scores?
A) 100-500
B) 300-850
C) 500-1000
D) 600-900
B) 300-850
What is considered an acceptable debt-to-income ratio for loan approval?
A) Below 20%
B) Below 36%
C) Below 50%
D) Above 50%
B) Below 36%
What is the difference between subsidized and unsubsidized federal student loans?
A) Subsidized loans do not accrue interest while in school, unsubsidized loans do
B) Unsubsidized loans have lower interest rates
C) Subsidized loans are private loans
D) Unsubsidized loans are only available to graduate students
A) Subsidized loans do not accrue interest while in school, unsubsidized loans do
Which financial mistake can negatively impact your credit score the most?
A) Opening multiple savings accounts
B) Paying bills late or missing payments
C) Using cash instead of credit
D) Checking your credit score frequently
B) Paying bills late or missing payments
Which program allows qualifying borrowers to have student loans forgiven after 120 payments while working for a nonprofit or government entity?
A) Teacher Loan Forgiveness
B) Public Service Loan Forgiveness (PSLF)
C) Extended Repayment Plan
D) Private Loan Refinancing
B) Public Service Loan Forgiveness (PSLF)
What is the best way to avoid paying high interest on credit card debt?
A) Making the minimum payment each month
B) Using multiple credit cards
C) Paying off the full balance every month
D) Requesting a credit limit increase
C) Paying off the full balance every month
Which budgeting rule recommends spending 50% of your income on needs, 30% on wants, and 20% on savings or debt repayment?
A) 10-10-80 Rule
B) 50-30-20 Rule
C) 70-20-10 Rule
D) Zero-Based Budgeting Rule
B) 50-30-20 Rule
What is the maximum amount a borrower can contribute annually to a Roth IRA?
A) $2,500
B) $6,500
C) $10,000
D) Unlimited
B) $6,500
What is a common financial mistake new dentists make after graduation?
A) Buying a house before establishing financial stability
B) Investing in retirement early
C) Living below their means
D) Paying off student loans aggressively
A) Buying a house before establishing financial stability
Which of the following is NOT a benefit of federal student loans compared to private loans?
A) Fixed interest rates
B) Income-driven repayment options
C) Loan forgiveness programs
D) Lower interest rates than private loans
D) Lower interest rates than private loans
What is the main difference between a fixed and variable interest rate?
A) Fixed rates can change over time, variable rates cannot
B) Variable rates fluctuate based on market conditions, fixed rates remain constant
C) Fixed rates are only used for mortgage loans
D) Variable rates are always lower than fixed rates
B) Variable rates fluctuate based on market conditions, fixed rates remain constant
Which of the following expenses would be classified as a “want” in a budget?
A) Rent
B) Student loan payment
C) Subscription streaming services
D) Health insurance
C) Subscription streaming services
What does “amortization” refer to in loan repayment?
A) Paying only interest on a loan
B) The schedule of payments reducing principal and interest over time
C) A penalty for paying off a loan early
D) Loan forgiveness programs
B) The schedule of payments reducing principal and interest over time
What is the best strategy for long-term financial success?
A) Saving for retirement early and minimizing debt
B) Taking on more credit cards
C) Making only minimum payments on loans
D) Ignoring credit reports
A) Saving for retirement early and minimizing debt