Questions and Answers
What are Federal Student Loans?
Federal Student Loans are loans provided by the government to help students pay for their education.
What document explains your rights and responsibilities as a federal student loan borrower?
Your Master Promissory Note.
Which loan type provides an interest subsidy?
Direct Subsidized Loans.
Who should you contact if you have trouble making payments once you leave school?
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How Much You Can Expect to Borrow?
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Who do you contact if you've already accepted more loan money than you need?
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What increases your total loan balance?
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How can you reduce your total loan cost?
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Prepare for Repayment after School.
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Who do you contact if you have questions about repayment plans?
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Who do you contact when it's time to enroll in a repayment plan?
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What percentage of your gross salary does the Consumer Financial Protection Bureau suggest your student loan payment be?
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Which repayment plan will you be placed on automatically unless you change it?
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Study Notes
Federal Student Loans
- Federal student loans are financial aids provided by the government to help students pay for college expenses.
Master Promissory Note
- This document explains the rights and responsibilities of federal student loan borrowers.
Direct Subsidized Loans
- These loans offer an interest subsidy, meaning the Department of Education pays the interest while the borrower is in school, during the grace period, and during deferment.
Loan Servicer Contact
- Borrowers should contact their loan servicer if they experience difficulties making payments after leaving school.
Borrowing Limits
- Understanding how much you can expect to borrow is essential for managing student debt.
Excess Loan Money
- If borrowers accept more loan money than needed, they should reach out to their school's financial aid office for assistance.
Loan Balance Increases
- Total loan balance can increase due to interest accrual and interest capitalization.
Reducing Loan Costs
- Borrowers can minimize total loan costs by making interest payments while in school and during the grace period.
Repayment Preparation
- Preparing for repayment after school is crucial for managing financial responsibilities effectively.
Repayment Plan Questions
- Questions about repayment plans should be directed to the loan servicer.
Enrollment in Repayment Plans
- Borrowers must contact their loan servicer to enroll in a repayment plan when the time comes.
Affordable Payment Percentage
- The Consumer Financial Protection Bureau recommends that student loan payments should not exceed 8% of gross salary to remain affordable and prevent delinquency.
Automatic Repayment Plan Assignment
- Borrowers will automatically be placed on the Standard Repayment Plan unless they contact their servicer to change it.
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Description
Test your knowledge on federal student loans with this quiz. Explore key concepts, rights, and responsibilities related to borrowing. Perfect for students preparing to manage their educational financing!
