Smart Money Certification Smc: College Smarts
Welcome to College Smarts, the final exam in LFE's Smart Money Certification!
As the cost of higher education continues to rise, it’s essential to learn how to reduce expenses and make smarter decisions in the selection process. It’s also crucial to identify — and avoid — the scams and pitfalls that cost students and parents thousands every year.
Plus, over 43 million Americans are struggling to repay well over $1.2 trillion in student loan debt. One of the biggest problems is the excess of confusing information available to borrowers, but there are also costly traps to avoid when working with some Read moreloan servicers.
This exam is designed to pinpoint these and other problems students (and parents) of all ages are facing, and to help SMC candidates master the confusing and complex topics covered in our College Smarts section.
As outlined in each exam, read each question carefully; often a simple word can change the entire meaning of the question or answer. Be sure to use the information in the on-demand videos and the links in the SMC Resource Guide to help you answer many of these questions. Good luck!
Questions and Answers
- 1.
The Net Price Calculator is used to determine the total student loan debt students will have upon graduation.
- A.
True
- B.
False
Correct Answer
B. FalseExplanation
The Net Price Calculator is not used to determine the total student loan debt students will have upon graduation. Instead, it is used to estimate the net price of attending a particular college or university, which includes tuition, fees, and other expenses minus any grants or scholarships. The calculator helps students and their families get an idea of how much they will need to pay out of pocket or borrow in loans to cover the cost of attendance.Rate this question:
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- 2.
Private and federal student loans are considered to be in default when a borrower misses 270 days of payments.
- A.
True
- B.
False
Correct Answer
B. FalseExplanation
Private and federal student loans are not considered to be in default after a borrower misses 270 days of payments. The correct answer is False. The timeframe for default on student loans can vary depending on the type of loan and the terms agreed upon, but generally, federal student loans go into default after 270 days of missed payments, while private student loans may have different default timelines.Rate this question:
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- 3.
The clock is ticking for first-time borrowers after July 1, 2013, on how long the government will subsidize (pay interest on) their student loans.
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
After July 1, 2013, the government will only subsidize the interest on student loans for first-time borrowers for a limited time. This means that the government will stop paying the interest on these loans after a certain period. Therefore, the statement "The clock is ticking for first-time borrowers after July 1, 2013, on how long the government will subsidize (pay interest on) their student loans" is true.Rate this question:
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- 4.
The Fair Credit Reporting Act allows debt collectors to discuss a borrower's student loan payment history and default status with an employer or family member.
- A.
True
- B.
False
Correct Answer
B. FalseExplanation
The Fair Credit Reporting Act does not allow debt collectors to discuss a borrower's student loan payment history and default status with an employer or family member. The Act prohibits the disclosure of this information to anyone other than the borrower, unless authorized by the borrower or required by law.Rate this question:
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- 5.
Defaulting on a student loan could play a part in determining where you'll be able to live, work, and possibly even who you marry in the future.
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
Defaulting on a student loan can have serious consequences that can impact various aspects of one's life. When a person defaults on a student loan, it can negatively affect their credit score, making it difficult to secure loans or mortgages in the future. This can limit their options for housing and potentially restrict their ability to live in certain areas. Additionally, employers may conduct credit checks as part of the hiring process, and a poor credit history due to defaulting on a loan could hinder job prospects. Lastly, defaulting on a loan can also impact personal relationships, as it can affect one's financial stability and ability to contribute to shared expenses, potentially influencing decisions regarding marriage.Rate this question:
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- 6.
New federal guidelines require private student loan lenders to offer the same repayment plans and terms available for federal loans.
- A.
True
- B.
False
Correct Answer
B. FalseExplanation
The given statement is false. The new federal guidelines do not require private student loan lenders to offer the same repayment plans and terms as federal loans. Private student loan lenders have their own set of repayment plans and terms that may differ from those offered by federal loans. These guidelines only apply to federal loans and do not regulate private student loans. Therefore, the statement is incorrect.Rate this question:
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- 7.
Consolidating student loan debts could erase benefits like forgiveness, cancellation, or discharge of some of the debt.
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
Consolidating student loan debts can indeed erase benefits such as forgiveness, cancellation, or discharge of some of the debt. When borrowers consolidate their loans, they typically combine multiple loans into one new loan, which may result in the loss of certain benefits associated with the original loans. This is because the consolidation process often involves obtaining a new loan with different terms and conditions, potentially negating any previous benefits that were attached to the individual loans being consolidated. Therefore, it is true that consolidating student loan debts can eliminate certain benefits.Rate this question:
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- 8.
A school's cohort default rate could affect a student's ability to graduate from that school, as well as their job prospects.
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
A school's cohort default rate refers to the percentage of students who have taken out federal student loans and then default on those loans within a certain timeframe. A high cohort default rate indicates that a significant number of students at that school are struggling to repay their loans. This can have a negative impact on the school's reputation and financial stability, which in turn can affect the quality of education and support services available to students. Additionally, potential employers may view graduates from schools with high default rates as less desirable candidates, potentially limiting job prospects for students.Rate this question:
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- 9.
A student loan rehabilitation can only be used to bring student loan debt out of default status once every five years.
- A.
True
- B.
False
Correct Answer
B. FalseExplanation
A student loan rehabilitation can be used to bring student loan debt out of default status multiple times, not just once every five years. This allows students who have defaulted on their loans to rehabilitate their debt and regain eligibility for benefits such as deferment, forbearance, and loan forgiveness.Rate this question:
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- 10.
CLEP exams, tuition exchanges, professional judgment reviews, or reciprocity programs are all strategies students may be able to use to cut college costs.
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
The statement is true because CLEP exams allow students to earn college credits by passing exams instead of taking courses, which can save them money on tuition. Tuition exchanges are agreements between colleges that allow students from one institution to attend another at a reduced cost. Professional judgment reviews involve financial aid officers reevaluating a student's financial need based on special circumstances, potentially resulting in more aid. Reciprocity programs allow students to pay in-state tuition rates at out-of-state colleges. All of these strategies can help students reduce their college costs.Rate this question:
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- 11.
Student loan debt could possibly qualify for forgiveness if the student was unable to graduate or did not have adequate skills to find a good job.
- A.
True
- B.
False
Correct Answer
B. FalseExplanation
The statement suggests that student loan debt could qualify for forgiveness if the student was unable to graduate or did not have adequate skills to find a good job. However, this statement is false. Student loan forgiveness programs typically have specific criteria, such as working in certain professions or for specific employers, making consistent payments for a certain period, or meeting income requirements. Graduation or job skills are not typically factors for loan forgiveness.Rate this question:
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- 12.
STEM is an important acronym for every college student today because it stands for Student Tuition Educational Mandates.
- A.
True
- B.
False
Correct Answer
B. FalseExplanation
The given statement is false because STEM does not stand for Student Tuition Educational Mandates. STEM is actually an acronym that stands for Science, Technology, Engineering, and Mathematics, which are fields of study that are considered important in today's world.Rate this question:
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- 13.
One of the key criteria used to evaluate the right school is whether it meets the Department of Education's 90/10 Rule.
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
The explanation for the given correct answer is that the Department of Education has a 90/10 Rule, which means that a school must receive at least 10% of its revenue from non-federal sources. This rule is used to ensure that schools are not overly reliant on federal funding and have diverse sources of income. Therefore, when evaluating a school, it is important to consider whether it meets this rule as it indicates financial stability and independence.Rate this question:
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- 14.
New federal guidelines require all remaining balances on student loan debt to be forgiven 20 years after the student leaves school.
- A.
True
- B.
False
Correct Answer
B. FalseExplanation
The given statement is false. The explanation is that the statement incorrectly states that new federal guidelines require all remaining balances on student loan debt to be forgiven 20 years after the student leaves school. In reality, there are various repayment plans and forgiveness options available for student loans, but there is no blanket requirement for forgiveness after 20 years. The forgiveness options depend on factors such as the type of loan, repayment plan, and the borrower's eligibility.Rate this question:
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- 15.
The government will subsidize (pay the interest on) student loans when the borrower is approved for a forbearance.
- A.
True
- B.
False
Correct Answer
B. FalseExplanation
The statement is false because the government does not subsidize or pay the interest on student loans when the borrower is approved for a forbearance. A forbearance is a temporary pause or reduction in loan payments granted by the lender, but the borrower is still responsible for paying the interest that accrues during this period. The government may provide other forms of assistance or relief for student loans, but it does not specifically subsidize loans during forbearance.Rate this question:
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- 16.
Some student loan servicers automatically place a loan in good standing into default if a co-signer files bankruptcy.
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
If a co-signer files for bankruptcy, some student loan servicers automatically consider the loan to be in default. This means that the borrower is no longer able to make payments on the loan and it can have serious consequences for their credit score and financial future.Rate this question:
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- 17.
Student loan servicers are not allowed to automatically place a loan in good standing into default if a co-signer passes away.
- A.
True
- B.
False
Correct Answer
B. FalseExplanation
Student loan servicers are allowed to automatically place a loan in good standing into default if a co-signer passes away. This is because the co-signer is responsible for the loan and their death can have an impact on the borrower's ability to repay the loan.Rate this question:
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- 18.
If an attorney can show undue hardship using the Brunner Test, you may be able to eliminate some or all of your student loan debt through bankruptcy.
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
The Brunner Test is a legal standard used by courts to determine whether a debtor can discharge their student loan debt through bankruptcy. If an attorney can successfully demonstrate that the debtor meets the requirements of the Brunner Test, which include showing that they have made a good faith effort to repay the loans, that they are unable to maintain a minimal standard of living due to the loan payments, and that their financial situation is unlikely to change in the future, then it is possible to eliminate some or all of the student loan debt through bankruptcy. Therefore, the statement is true.Rate this question:
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- 19.
The College Scorecard is used to identify the average cost, graduation rate, salary 10 years after graduation, and student loan debt at specific schools.
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
The College Scorecard is a tool that provides information about specific schools, including their average cost, graduation rate, salary 10 years after graduation, and student loan debt. This allows students and their families to make informed decisions about which schools to attend based on factors such as affordability, job prospects, and potential debt burden. Therefore, the statement that the College Scorecard is used to identify these factors at specific schools is true.Rate this question:
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- 20.
To make the most of the investment in college, which of the following questions should be a high priority?
- A.
Are the student's friends going there?
- B.
Is the campus inviting?
- C.
What's the ROI of the school?
- D.
Are there cultural events in the area?
- E.
What's the school's debt level?
- F.
All of the above
- G.
C and D
- H.
C and E
Correct Answer
H. C and EExplanation
The question asks about prioritizing the most important factor for making the most of the investment in college. Option C asks about the school's debt level, which is crucial as it indicates the financial stability and potential risks associated with the institution. Option E asks about the ROI (Return on Investment) of the school, which is also significant as it helps determine the value and potential benefits of the education provided. Therefore, prioritizing these factors (C and E) would be essential for maximizing the investment in college.Rate this question:
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- 21.
Which of these questions are essential to ask when selecting a degree program?
- A.
Is a degree necessary for the career field I want?
- B.
Is GPA important for a specific degree?
- C.
Will there be jobs in this field upon graduation?
- D.
Will the job pay enough to repay the amount of debt incurred?
- E.
All of the above
- F.
None of the above; the degree is not as important as the school you attend
Correct Answer
E. All of the aboveExplanation
When selecting a degree program, it is essential to ask all of the above questions. Determining if a degree is necessary for the desired career field helps in making an informed decision. Considering the importance of GPA for a specific degree is crucial as it may affect future opportunities. Assessing the job prospects in the chosen field upon graduation helps in understanding the potential for employment. Additionally, evaluating if the job will pay enough to repay the debt incurred during education is important for financial planning. Therefore, all of these questions are essential to consider when selecting a degree program.Rate this question:
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- 22.
It's a good investment to pay a scholarship search firm to identify the best scholarships.
- A.
True
- B.
False
Correct Answer
B. FalseExplanation
Paying a scholarship search firm to identify the best scholarships may not necessarily be a good investment. There are numerous free resources available, such as online databases and college financial aid offices, that can help individuals find scholarships without the need for a paid service. Additionally, some scholarship search firms may not have access to all available scholarships, and their services may not guarantee success in obtaining scholarships. Therefore, it is not always necessary or advisable to pay for a scholarship search firm.Rate this question:
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- 23.
Which of the following are reputable places to begin the process of identifying possible scholarships or financial assistance?
- A.
Fastweb.com
- B.
FDIC.gov
- C.
AFCEA.org
- D.
SallieMae.com
- E.
CFPB.gov
- F.
All of the above
- G.
A, C, and D
- H.
B, C, and E
Correct Answer
G. A, C, and DExplanation
Fastweb.com, AFCEA.org, and SallieMae.com are reputable places to begin the process of identifying possible scholarships or financial assistance. These websites provide reliable information and resources for students to search and apply for scholarships and financial aid. FDIC.gov and CFPB.gov are not relevant to scholarships or financial assistance, so they are not reputable places for this purpose. Therefore, the correct answer is A, C, and D.Rate this question:
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- 24.
There are scholarships for many types of students, including which of the following?
- A.
War veterans
- B.
STEM majors
- C.
Twins attending specific schools
- D.
Tall people
- E.
Golf caddies
- F.
All of the above
- G.
A and B
Correct Answer
F. All of the aboveExplanation
The correct answer is "All of the above." This means that there are scholarships available for war veterans, STEM majors, twins attending specific schools, tall people, and golf caddies. This implies that students belonging to any of these categories can apply for scholarships and potentially receive financial assistance for their education.Rate this question:
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- 25.
Which of the following are optional strategies to reduce the cost of college?
- A.
Reciprocity programs
- B.
Qualifying for in-state tuition
- C.
CLEP exams
- D.
Professional judgment review
- E.
Free tuition programs
- F.
All of the above
- G.
B and C
Correct Answer
F. All of the aboveExplanation
All of the options listed, including reciprocity programs, qualifying for in-state tuition, CLEP exams, professional judgment review, and free tuition programs, are optional strategies that can help reduce the cost of college. These strategies can provide opportunities for students to save money by taking advantage of programs and resources available to them, such as reduced tuition rates, earning college credits through exams, or receiving financial aid through professional judgment reviews.Rate this question:
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- 26.
Students should beware of which of the following traps related to their student ID cards?
- A.
Activation fees
- B.
Usage fees
- C.
Overdraft penalties
- D.
Interest charges
- E.
All of the above
- F.
None of the above; college ID cards are free to students
Correct Answer
E. All of the aboveExplanation
Students should beware of all of the traps related to their student ID cards, including activation fees, usage fees, overdraft penalties, and interest charges. This means that students should be cautious about any additional charges or penalties that may be associated with their ID cards, as they may have to pay fees for activating the card, using it for certain services, facing penalties for overdrawing their accounts, or even paying interest charges on outstanding balances. It is important for students to carefully read the terms and conditions associated with their ID cards to avoid any unexpected costs or penalties.Rate this question:
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- 27.
Colleges are not allowed to use predatory schemes to attract students, or advertise inflated or phony job guarantees, yet some for-profit schools still use these techniques.
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
The statement suggests that although colleges are prohibited from using deceptive tactics to attract students or make false promises about job guarantees, some for-profit schools continue to engage in such practices. Therefore, the correct answer is True, indicating that the statement is accurate.Rate this question:
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- 28.
Attending a school without accreditation could make it difficult for a student to...
- A.
Obtain federal financial aid
- B.
Transfer credits to an accredited school
- C.
Get a job
- D.
All of the above
- E.
A and B
- F.
B and C
Correct Answer
D. All of the aboveExplanation
Attending a school without accreditation could make it difficult for a student to obtain federal financial aid because most financial aid programs require students to attend accredited institutions. It could also make it challenging for them to transfer credits to an accredited school since many accredited institutions do not accept credits from unaccredited schools. Additionally, not having accreditation could hinder a student's job prospects as many employers prefer to hire candidates with degrees from accredited institutions. Therefore, all of the above options are valid consequences of attending a school without accreditation.Rate this question:
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- 29.
The term diploma mills can refer to colleges or schools that...
- A.
Offer credit for work experience without asking too many questions about that experience
- B.
Charge for a degree up front, not per semester hour
- C.
Do not require high school or previous college transcripts
- D.
Fail to publish or disclose the names and expertise of their professors
- E.
All of the above
- F.
None of the above; they are legitimate schools that specialize in unique areas of study
Correct Answer
E. All of the aboveExplanation
Diploma mills refer to colleges or schools that engage in unethical practices such as offering credit for work experience without proper verification, charging a lump sum for a degree instead of a per-credit-hour fee, not requiring transcripts for admission, and withholding information about their faculty members. The correct answer is "All of the above" because all the mentioned characteristics are associated with diploma mills.Rate this question:
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- 30.
If an organization charges a large up-front fee to apply for college funding, it's probably a scam.
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
Charging a large up-front fee to apply for college funding is likely a scam because legitimate organizations typically do not require such fees. Legitimate sources of college funding, such as scholarships, grants, and government programs, do not usually require applicants to pay a fee to apply. Therefore, it is important to be cautious and skeptical of any organization that asks for a large up-front fee for college funding applications.Rate this question:
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- 31.
Phony landlords often place ads for bogus rental properties that are near college campuses, but that they don't actually own.
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
Phony landlords deceive people by advertising fake rental properties near college campuses that they do not own. This is a common scam where individuals pretend to be landlords and try to trick students or tenants into paying rent or providing personal information for non-existent properties. It is important for renters to be cautious and verify the legitimacy of landlords and rental properties before making any payments or commitments.Rate this question:
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- 32.
Which of the following are possible drawbacks of a borrower consolidating a variety of student loans?
- A.
Loss of the ability to defer payments during periods of financial hardship
- B.
Debt forgiveness programs may no longer be available for some of the loans
- C.
It may be harder to discharge specific loans in bankruptcy
- D.
Possibility of paying more interest over the life of the loan
- E.
All of the above
- F.
A and B
- G.
C and D
Correct Answer
E. All of the aboveExplanation
Consolidating a variety of student loans can have several drawbacks. Firstly, the borrower may lose the ability to defer payments during periods of financial hardship. Secondly, debt forgiveness programs may no longer be available for some of the loans. Thirdly, it may be harder to discharge specific loans in bankruptcy. Lastly, there is a possibility of paying more interest over the life of the loan. Therefore, all of the above options are possible drawbacks of a borrower consolidating student loans.Rate this question:
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- 33.
Once a student loan debt has been rehabilitated, the borrower...
- A.
Has access to income-based repayment options
- B.
Is able to borrow more money to complete his/her education
- C.
May be eligible for loan forgiveness programs
- D.
Has improved credit since the "default" status on the loan is removed
- E.
All of the above
- F.
A, B, and C
Correct Answer
E. All of the aboveExplanation
Once a student loan debt has been rehabilitated, the borrower has access to income-based repayment options, is able to borrow more money to complete his/her education, may be eligible for loan forgiveness programs, and has improved credit since the "default" status on the loan is removed.Rate this question:
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- 34.
A student loan deferment is available for all student loan borrowers who are struggling to make their payments.
- A.
True
- B.
False
Correct Answer
B. FalseExplanation
False. A student loan deferment is not available for all student loan borrowers who are struggling to make their payments. While deferment options may be available for some borrowers, eligibility criteria and specific circumstances vary depending on the type of loan and the lender. It is important for borrowers to contact their loan servicer or lender to discuss their options and determine if they qualify for deferment or other payment assistance programs.Rate this question:
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- 35.
A student loan deferment helps borrowers who are struggling to repay their loans put a hold on their payments for up to 12 months due to a job loss or other hardship.
- A.
True
- B.
False
Correct Answer
B. FalseExplanation
A student loan deferment does not necessarily help borrowers who are struggling to repay their loans due to a job loss or other hardship. While a deferment may be an option for some borrowers facing financial difficulties, it is not automatically granted in such situations. The eligibility for a deferment depends on various factors, including the type of loan and the borrower's specific circumstances. Therefore, it is not accurate to say that a deferment helps all borrowers who are struggling to repay their loans.Rate this question:
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- 36.
Depending on the type of loan, the government may pay the interest on student loans in deferment.
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
Depending on the type of loan, it is possible for the government to pay the interest on student loans that are in deferment. This means that during the deferment period, the borrower does not have to make payments on the loan and the government covers the interest that accrues. However, it is important to note that this may not apply to all types of student loans, and eligibility for this benefit may vary.Rate this question:
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- 37.
A student loan forbearance allows borrowers who are struggling to repay their loans — generally due to financial hardship or illness — to reduce or even stop making their payments for up to 12 months.
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
A student loan forbearance is a program that provides temporary relief to borrowers who are facing difficulties in repaying their loans. This relief is typically offered to individuals who are experiencing financial hardship or illness. During the forbearance period, borrowers have the option to reduce or completely stop making their loan payments for a duration of up to 12 months. Therefore, the statement "True" accurately reflects the concept of a student loan forbearance.Rate this question:
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- 38.
The government will pay the interest on student loans during the time they are in forbearance.
- A.
True
- B.
False
Correct Answer
B. FalseExplanation
The government does not pay the interest on student loans during the time they are in forbearance. When a loan is in forbearance, the borrower is responsible for paying the interest that accrues on the loan. This means that interest continues to accumulate on the loan balance, and the borrower will have to pay that interest once the forbearance period ends.Rate this question:
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- 39.
A mandatory forbearance means the lender must allow it.
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
A mandatory forbearance refers to a situation where the lender is legally required to grant the forbearance. This means that the lender does not have the option to deny or refuse the forbearance request. Therefore, the statement "A mandatory forbearance means the lender must allow it" is true.Rate this question:
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- 40.
A lender must provide a forbearance on a student loan if the borrower qualifies for a partial repayment of their loans under the DOD Student Loan Repayment Program.
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
The explanation for the given correct answer is that according to the statement, a lender is required to provide a forbearance on a student loan if the borrower qualifies for a partial repayment of their loans under the DOD Student Loan Repayment Program. This means that if a borrower meets the criteria for partial repayment under this program, the lender must temporarily suspend or reduce the borrower's loan payments. Therefore, the statement is true.Rate this question:
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- 41.
The amount paid every month on an income-driven repayment plan will remain consistent over the life of the loan.
- A.
True
- B.
False
Correct Answer
B. FalseExplanation
The statement is false because on an income-driven repayment plan, the amount paid every month is based on the borrower's income and family size. As these factors can change over time, the monthly payment amount can also change. Therefore, the amount paid every month on an income-driven repayment plan will not remain consistent over the life of the loan.Rate this question:
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- 42.
The amount remaining after making on-time payments for 10 years in an income-driven repayment plan will be forgiven.
- A.
True
- B.
False
Correct Answer
B. FalseExplanation
The statement is false because in an income-driven repayment plan, the remaining balance after making on-time payments for 20 to 25 years (depending on the specific plan) will be forgiven, not after 10 years.Rate this question:
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- 43.
The minimum monthly payment on an income-driven repayment plan may be as low as $0, but it will still count toward the total number of monthly payments due until the remaining balance is forgiven.
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
The explanation for the given correct answer is that on an income-driven repayment plan, the minimum monthly payment can be as low as $0. However, even though the payment is $0, it still counts towards the total number of monthly payments due until the remaining balance is forgiven. This means that even if the payment is not required, it is still considered as a payment towards the loan and counts towards the total number of payments required for forgiveness.Rate this question:
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- 44.
Income-sensitive repayment plans are only available to those with Parent PLUS loans.
- A.
True
- B.
False
Correct Answer
B. FalseExplanation
Income-sensitive repayment plans are not only available to those with Parent PLUS loans. These plans are actually available for certain types of federal student loans, including Direct Subsidized Loans, Direct Unsubsidized Loans, and Federal Family Education Loans. These plans allow borrowers to adjust their monthly loan payments based on their income and family size. Therefore, the statement that income-sensitive repayment plans are only available to those with Parent PLUS loans is incorrect.Rate this question:
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- 45.
A student loan may be discharged or canceled due to...
- A.
The school closing
- B.
The borrower becoming totally and permanently disabled
- C.
The death of the borrower
- D.
The school issuing a false certification of student eligibility
- E.
All of the above
- F.
B and D
- G.
A, B, and C
Correct Answer
E. All of the aboveExplanation
A student loan may be discharged or canceled due to various reasons. If the school closes, the borrower may be eligible for loan discharge as they are unable to complete their education. If the borrower becomes totally and permanently disabled, they may also qualify for loan discharge. In the unfortunate event of the borrower's death, the loan may be discharged as well. Additionally, if the school issues a false certification of student eligibility, the borrower may be eligible for loan discharge. Therefore, all of the options listed in the answer are valid reasons for a student loan to be discharged.Rate this question:
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- 46.
It is sometimes easier to discharge private student loans than federal student loans.
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
Private student loans are typically easier to discharge than federal student loans because they are not backed by the government. While federal student loans have more options for deferment, forbearance, and income-driven repayment plans, private student loans do not offer the same level of flexibility. In certain situations, such as bankruptcy, private student loans may be discharged entirely, while federal student loans are generally not dischargeable except in cases of extreme hardship. Therefore, it is true that it is sometimes easier to discharge private student loans than federal student loans.Rate this question:
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- 47.
If the college you attend was not Title IV eligible, it may be easier to have the student loans discharged by communicating with the lender or through bankruptcy proceedings.
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
If a college is not Title IV eligible, it means that it does not meet the requirements to participate in federal financial aid programs. This can make it easier for students to have their student loans discharged, either by communicating with the lender or through bankruptcy proceedings. Without Title IV eligibility, the college may not have met certain standards or may have engaged in fraudulent practices, making it more likely for the loans to be discharged. Therefore, the statement that it may be easier to have student loans discharged in this situation is true.Rate this question:
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- 48.
Those who are struggling to repay their loans should first contact...
- A.
The school
- B.
The FTC
- C.
The loan servicer
- D.
The Department of Education
- E.
Any of the above
- F.
A or D
Correct Answer
C. The loan servicerExplanation
When individuals are struggling to repay their loans, the first point of contact should be the loan servicer. The loan servicer is responsible for managing the loan repayment process and can provide guidance and assistance to borrowers facing financial difficulties. They can offer options such as loan deferment, forbearance, or a revised repayment plan to help borrowers manage their loan obligations. Therefore, reaching out to the loan servicer is the most appropriate action to take in this situation.Rate this question:
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- 49.
Retirees can have their student loans forgiven if they wait until age 66 to begin collecting Social Security.
- A.
True
- B.
False
Correct Answer
B. FalseExplanation
The statement is false because waiting until age 66 to begin collecting Social Security does not automatically result in student loan forgiveness for retirees. Student loan forgiveness programs typically have specific eligibility criteria and requirements that must be met in order for loans to be forgiven. Age alone is not a determining factor for loan forgiveness.Rate this question:
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- 50.
If a student fails to make their student loan payments, anyone who co-signed on the loans can be held liable for the remaining debt.
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
If a student fails to make their student loan payments, anyone who co-signed on the loans can be held liable for the remaining debt. This means that if a student is unable to repay their student loans, the responsibility falls on the co-signer to make the payments. Co-signing a loan essentially means that the co-signer is equally responsible for the debt and can be pursued for repayment if the primary borrower defaults. Therefore, it is important for individuals to carefully consider the implications before agreeing to co-sign a loan.Rate this question:
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Current Version
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Mar 14, 2023Quiz Edited by
ProProfs Editorial Team -
Nov 10, 2015Quiz Created by
Alice Whinnery
Shree Sant Gajanan Maharaj College of Engineering,Shegaon,MH(444203)
Shree Sant Gajanan Maharaj College of Engineering,Shegaon,MH(444203)
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