Finance Quiz

1. What is a student loan?
A loan taken by a student to pay for their education.
A scholarship provided to students to pay for their education.
A loan taken by parents to pay for their child's education.
2. Which entity typically issues student loans in the United States?
Private banks and financial institutions
The federal government
Both
3. What is the difference between a subsidized and an unsubsidized student loan?
Subsidized loans have lower interest rates than unsubsidized loans.
Subsidized loans are only available to graduate students.
The government pays the interest on subsidized loans while the student is in school, but not on unsubsidized loans.
4. What is the maximum amount of federal student loan debt a student can borrow?
There is no maximum amount.
$50,000
$100,000
5. Can student loans be used to pay for living expenses while in college?
Yes
No
Only if the student is living on campus.
6. What is the Free Application for Federal Student Aid (FAFSA)?
An application to apply for federal student grants
An application to apply for both federal student loans and grants
An application to apply for federal student loans
7. What is the difference between a fixed and variable interest rate on a student loan?
Variable interest rates stay the same over the life of the loan, while fixed rates can change.
Fixed interest rates stay the same over the life of the loan, while variable rates can change.
There is no difference between fixed and variable interest rates.
8. What is loan deferment?
When the student loan payments are temporarily paused.
When the student loan is forgiven and does not have to be paid back.
When the student loan payments are reduced.
9. What is loan consolidation?
When a student loan is reduced or forgiven.
When the interest rate on a student loan is lowered.
When multiple student loans are combined into one loan with one payment.
10. What is the difference between a private and federal student loan?
Private loans have higher interest rates than federal loans.
Private loans are only available to students with good credit.
Federal loans have more flexible repayment options and forgiveness programs.
11. How does a student qualify for a federal student loan?
They must be a U.S. citizen or eligible non-citizen.
They must be enrolled in an accredited college or university.
Both
12. What is a cosigner on a student loan?
Someone who is responsible for paying the loan if the student cannot.
Someone who takes out the loan with the student.
Someone who helps the student fill out the loan application.
13. How does a student loan impact a person's credit score?
It can either positively or negatively impact their credit score, depending on whether or not they make payments on time.
It has no impact on their credit score.
It always negatively impacts their credit score.
14. Can a student loan be discharged in bankruptcy?
Yes, but only in certain circumstances.
No, student loans cannot be discharged in bankruptcy.
Yes, student loans can always be discharged in bankruptcy.
15. What is loan forbearance?
When the student loan is forgiven and does not have to be paid back.
When the student loan payments are temporarily paused or reduced.
When the interest rate on a student loan is lowered.