Quiz for Loans: the good, bad, ugly

The federal government lends college students money each year.

The federal government loan rate stays the same for all 4 years.

The federal government loan is always referred to as a “Direct Loan.”

The federal government will lend you all the money you need to attend college.

Correct! Wrong!

No, because you have all the time in the world to pay it back.

Yes, it’s smart to limit the amount you borrow based on the career you expect to have.

Don’t worry: “They” aren’t going to let you borrow too much.

It’s too far in the future to tell. Why not borrow now and figure things out later?

Correct! Wrong!

They have higher interest rates than government loans.

They often require co-signers.

Their payback plans tend to be more rigid and restrictive.

Students can end up borrowing too much.

There are a lot of private loan companies, which means students could easily lose track of some of their loans.

All of the above and then some!

Correct! Wrong!

You can be really wealthy and still get low interest government loans.

Low income families can get loans where the government pays the interest while you are in school. These are called “subsidized” loans.

Co-signers are required on federal government loans.

If you get an unsubsidized government loan, you will be charged interest as soon as the government lends the money to your school.

Correct! Wrong!