Smart Money Certification Smc: College Smarts

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  • 1/92 Questions

    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.

    • True
    • False
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About This Quiz

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 loan 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!

Smart Money Certification Smc: College Smarts - Quiz

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  • 2. 

    Consolidating student loan debts could erase benefits like forgiveness, cancellation, or discharge of some of the debt.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    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.

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  • 3. 

    CLEP exams, tuition exchanges, professional judgment reviews, or reciprocity programs are all strategies students may be able to use to cut college costs.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    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.

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  • 4. 

    STEM is an important acronym for every college student today because it stands for Student Tuition Educational Mandates.

    • True

    • False

    Correct Answer
    A. False
    Explanation
    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.

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  • 5. 

    The College Scorecard is used to identify the average cost, graduation rate, salary 10 years after graduation, and student loan debt at specific schools.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    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.

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  • 6. 

    Which of the following are optional strategies to reduce the cost of college?

    • Reciprocity programs

    • Qualifying for in-state tuition

    • CLEP exams

    • Professional judgment review

    • Free tuition programs

    • All of the above

    • B and C

    Correct Answer
    A. All of the above
    Explanation
    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.

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  • 7. 

    Students should beware of which of the following traps related to their student ID cards?

    • Activation fees

    • Usage fees

    • Overdraft penalties

    • Interest charges

    • All of the above

    • None of the above; college ID cards are free to students

    Correct Answer
    A. All of the above
    Explanation
    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.

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  • 8. 

    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.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    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.

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  • 9. 

    Attending a school without accreditation could make it difficult for a student to...

    • Obtain federal financial aid

    • Transfer credits to an accredited school

    • Get a job

    • All of the above

    • A and B

    • B and C

    Correct Answer
    A. All of the above
    Explanation
    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.

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  • 10. 

    The term diploma mills can refer to colleges or schools that...

    • Offer credit for work experience without asking too many questions about that experience

    • Charge for a degree up front, not per semester hour

    • Do not require high school or previous college transcripts

    • Fail to publish or disclose the names and expertise of their professors

    • All of the above

    • None of the above; they are legitimate schools that specialize in unique areas of study

    Correct Answer
    A. All of the above
    Explanation
    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.

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  • 11. 

    If an organization charges a large up-front fee to apply for college funding, it's probably a scam.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    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.

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  • 12. 

    Phony landlords often place ads for bogus rental properties that are near college campuses, but that they don't actually own.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    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.

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  • 13. 

    A mandatory forbearance means the lender must allow it.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    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.

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  • 14. 

    The amount paid every month on an income-driven repayment plan will remain consistent over the life of the loan.

    • True

    • False

    Correct Answer
    A. False
    Explanation
    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.

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  • 15. 

    Income-sensitive repayment plans are only available to those with Parent PLUS loans.

    • True

    • False

    Correct Answer
    A. False
    Explanation
    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.

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  • 16. 

    Those who are struggling to repay their loans should first contact...

    • The school

    • The FTC

    • The loan servicer

    • The Department of Education

    • Any of the above

    • A or D

    Correct Answer
    A. The loan servicer
    Explanation
    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.

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  • 17. 

    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.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    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.

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  • 18. 

    Federal law prohibits lenders from reporting student loan defaults to the credit reporting agencies.

    • True

    • False

    Correct Answer
    A. False
    Explanation
    This statement is false. Federal law does not prohibit lenders from reporting student loan defaults to the credit reporting agencies. In fact, student loan defaults can have a significant impact on an individual's credit score and credit history. Lenders have the right to report defaults to the credit reporting agencies, which can result in negative consequences for the borrower's creditworthiness.

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  • 19. 

    Once a student loan has gone into default and been turned over to a debt collector, added collection fees can increase the debt owed by up to 40%.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    Once a student loan has gone into default and is transferred to a debt collector, additional collection fees can be added to the debt. These fees can increase the total amount owed by as much as 40%. This means that if a student loan is not repaid and goes into default, the borrower may end up owing significantly more than the original loan amount due to these added fees. Therefore, the statement is true.

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  • 20. 

    Interest is waived for those who let their student loans go into default due to an inability to find a job.

    • True

    • False

    Correct Answer
    A. False
    Explanation
    The statement is false because interest is not waived for those who let their student loans go into default due to an inability to find a job. In most cases, interest continues to accrue on student loans even if the borrower is unable to find employment. Defaulting on student loans can have serious consequences, including damage to credit scores and potential legal action from lenders. It is important for borrowers to explore options such as deferment or income-driven repayment plans if they are struggling to make payments.

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  • 21. 

    A borrower can consolidate their own federal student loans with those of a spouse.

    • True

    • False

    Correct Answer
    A. False
    Explanation
    A borrower cannot consolidate their own federal student loans with those of a spouse. Federal student loan consolidation only allows borrowers to consolidate their own federal student loans, not the loans of a spouse or any other individual. Consolidation combines multiple loans into one, simplifying the repayment process, but it is limited to an individual's own loans.

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  • 22. 

    Typically, borrowers will need to qualify — and may also need a good credit score — to consolidate their student loan debt.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    Borrowers typically need to meet certain qualifications and may also need a good credit score in order to consolidate their student loan debt. This means that not all borrowers will be eligible for loan consolidation, and having a good credit score can increase the likelihood of being approved for consolidation. Therefore, the statement "Typically, borrowers will need to qualify and may also need a good credit score to consolidate their student loan debt" is true.

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  • 23. 

    Which of the following are benefits of consolidating student loans?

    • Fixed interest rate

    • Lower monthly payments

    • One payment to make each month

    • All of the above

    • B and C

    • A and C

    Correct Answer
    A. All of the above
    Explanation
    Consolidating student loans offers several benefits. Firstly, it provides a fixed interest rate, which means that the interest rate remains the same throughout the repayment period, providing stability and predictability. Secondly, it allows for lower monthly payments by extending the repayment term, making it more manageable for borrowers. Lastly, consolidating student loans combines multiple loans into one, simplifying the repayment process by requiring only one payment each month. Therefore, all the options listed (fixed interest rate, lower monthly payments, and one payment to make each month) are benefits of consolidating student loans.

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  • 24. 

    Consolidating student loans will eliminate any remaining grace period.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    Consolidating student loans involves combining multiple loans into one, typically with a new lender. When this consolidation occurs, the existing loans are paid off and a new loan is created. As a result, the grace period that may have been associated with the original loans is eliminated. This means that once the consolidation is complete, the borrower will no longer have the benefit of a grace period before they are required to start making payments on their consolidated loan. Therefore, the statement that consolidating student loans will eliminate any remaining grace period is true.

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  • 25. 

    Students should beware of late fees if payments are not made in a timely manner after their student loan is sold to a new loan servicer.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    The statement is advising students to be cautious about late fees if they do not make timely payments after their student loan is transferred to a new loan servicer. This implies that there is a possibility of late fees being imposed by the new loan servicer if payments are not made on time. Therefore, the statement is true and students should be aware of this potential consequence.

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  • 26. 

    The mean SAT or ACT score of a college is not one of the key criteria students should use when selecting a school.

    • True

    • False

    Correct Answer
    A. False
    Explanation
    The explanation for the given answer, False, is that the mean SAT or ACT score of a college can be an important criterion for students to consider when selecting a school. These standardized test scores can provide an indication of the academic standards and competitiveness of a college. However, it is not the only factor that should be considered, as there are other important aspects such as the college's curriculum, location, campus culture, extracurricular activities, and financial aid options that should also be taken into account.

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  • 27. 

    FAFSA stands for Free Application for Federal Student Aid.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    FAFSA stands for Free Application for Federal Student Aid. This acronym is used to refer to the application process through which students can apply for financial aid from the federal government to help cover the cost of their education. The FAFSA is an important step for students who are seeking financial assistance for college or university. By completing the FAFSA, students provide information about their financial situation, which is then used to determine their eligibility for various forms of federal aid, such as grants, loans, and work-study opportunities. Therefore, the statement "FAFSA stands for Free Application for Federal Student Aid" is true.

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  • 28. 

    As of May 2015, students now need an FSA ID (a username and password) to log in to FAFSA or StudentLoans.gov.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    Starting from May 2015, students are required to have an FSA ID, which consists of a username and password, in order to access their accounts on platforms like FAFSA or StudentLoans.gov. This measure was implemented to enhance security and protect students' personal information.

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  • 29. 

    A credit score isn't important to students while they are still in school.

    • True

    • False

    Correct Answer
    A. False
    Explanation
    This statement is false because a credit score can be important to students while they are still in school. Building a good credit score early on can benefit students in the future when they need to apply for loans, credit cards, or even rent an apartment. It is important for students to establish responsible financial habits and understand the importance of maintaining a good credit score.

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  • 30. 

    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.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    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.

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  • 31. 

    A school's cohort default rate could affect a student's ability to graduate from that school, as well as their job prospects.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    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.

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  • 32. 

    One of the key criteria used to evaluate the right school is whether it meets the Department of Education's 90/10 Rule.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    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.

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  • 33. 

    Which of these questions are essential to ask when selecting a degree program?

    • Is a degree necessary for the career field I want?

    • Is GPA important for a specific degree?

    • Will there be jobs in this field upon graduation?

    • Will the job pay enough to repay the amount of debt incurred?

    • All of the above

    • None of the above; the degree is not as important as the school you attend

    Correct Answer
    A. All of the above
    Explanation
    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.

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  • 34. 

    It's a good investment to pay a scholarship search firm to identify the best scholarships.

    • True

    • False

    Correct Answer
    A. False
    Explanation
    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.

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  • 35. 

    Depending on the type of loan, the government may pay the interest on student loans in deferment.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    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.

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  • 36. 

    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.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    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.

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  • 37. 

    The government has the ability to garnish Social Security checks for federal student loans that are in default.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    The government has the authority to withhold Social Security checks to repay federal student loans that are in default. This means that if someone has defaulted on their student loans, the government can legally garnish a portion of their Social Security benefits to recover the outstanding debt. This measure is taken to ensure that individuals fulfill their financial obligations and repay their student loans, even if it means using their Social Security income.

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  • 38. 

    Defaulting on a student loan can make it difficult to open a bank account, obtain a new cell phone plan, or sign up for utilities.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    Defaulting on a student loan can have various negative consequences such as difficulty in opening a bank account, obtaining a new cell phone plan, or signing up for utilities. This is because defaulting on a loan reflects poorly on an individual's credit history, making them a higher risk for lenders and service providers. As a result, they may be denied access to these basic financial services and utilities.

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  • 39. 

    IBR and Pay As You Earn repayment plans for federal student loans require a partial financial hardship to qualify.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    IBR (Income-Based Repayment) and Pay As You Earn repayment plans for federal student loans indeed require a partial financial hardship to qualify. These repayment plans are designed to make loan repayment more manageable for borrowers who are experiencing financial difficulties. By considering the borrower's income and family size, these plans adjust the monthly loan payments accordingly. Therefore, if a borrower does not have a partial financial hardship, they may not be eligible for these repayment plans.

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  • 40. 

    The student loan balance at the end of an income-driven repayment plan will be forgiven.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    Under an income-driven repayment plan, the student loan balance can be forgiven at the end. This is because income-driven repayment plans typically have a forgiveness provision after a certain number of years of making payments. The specific number of years can vary depending on the type of income-driven plan. However, it is important to note that forgiveness is not automatic and certain conditions need to be met, such as consistently making payments for the required number of years and meeting other eligibility criteria.

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  • 41. 

    Monthly payments on an income-driven student loan will go up as the borrower's income rises, but may be reduced due to the individual's family size.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    The statement is true because income-driven student loan payments are calculated based on the borrower's income. As the borrower's income increases, their monthly payments will also increase. However, the payments may be reduced if the borrower has a larger family size, as the calculation takes into account the individual's family size and adjusts the payment accordingly.

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  • 42. 

    Borrowers can identify their loan servicer by going to the National Student Loan Data System (NSLDS) Web site and logging in with their FSA ID.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    Borrowers can identify their loan servicer by logging into the National Student Loan Data System (NSLDS) website using their FSA ID.

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  • 43. 

    Attending a big-name or well-known school is essential for obtaining a good job in today's tight job market.

    • True

    • False

    Correct Answer
    A. False
    Explanation
    The statement suggests that attending a big-name or well-known school is necessary for getting a good job in the current job market. However, this is not entirely true. While attending a prestigious school may provide certain advantages, such as networking opportunities, it is not the sole determining factor for obtaining a good job. Employers also consider factors such as skills, experience, and personal qualities. Therefore, it is false to claim that attending a well-known school is essential for securing a good job in today's competitive job market.

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  • 44. 

    Which of the following are important college selection criteria for students to consider when comparing specific schools?

    • The number of years it takes the average student to graduate

    • The percentage of students who actually graduate

    • The amount of debt incurred by the average student

    • The default rate of former students

    • All of the above

    • A and C

    • B and C

    Correct Answer
    A. All of the above
    Explanation
    When comparing specific schools, it is important for students to consider the number of years it takes the average student to graduate, the percentage of students who actually graduate, the amount of debt incurred by the average student, and the default rate of former students. These criteria provide valuable information about the school's academic quality, student success rates, financial burden, and the ability of graduates to repay their loans. Considering all of these factors can help students make an informed decision about which college to choose.

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  • 45. 

    A student loan rehabilitation can only be used to bring student loan debt out of default status once every five years.

    • True

    • False

    Correct Answer
    A. False
    Explanation
    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.

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  • 46. 

    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.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    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.

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  • 47. 

    To make the most of the investment in college, which of the following questions should be a high priority?

    • Are the student's friends going there?

    • Is the campus inviting?

    • What's the ROI of the school?

    • Are there cultural events in the area?

    • What's the school's debt level?

    • All of the above

    • C and D

    • C and E

    Correct Answer
    A. C and E
    Explanation
    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.

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  • 48. 

    Which of the following are possible drawbacks of a borrower consolidating a variety of student loans?

    • Loss of the ability to defer payments during periods of financial hardship

    • Debt forgiveness programs may no longer be available for some of the loans

    • It may be harder to discharge specific loans in bankruptcy

    • Possibility of paying more interest over the life of the loan

    • All of the above

    • A and B

    • C and D

    Correct Answer
    A. All of the above
    Explanation
    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.

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  • 49. 

    A student loan may be discharged or canceled due to...

    • The school closing

    • The borrower becoming totally and permanently disabled

    • The death of the borrower

    • The school issuing a false certification of student eligibility

    • All of the above

    • B and D

    • A, B, and C

    Correct Answer
    A. All of the above
    Explanation
    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.

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Quiz Review Timeline (Updated): Mar 14, 2023 +

Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.

  • Current Version
  • Mar 14, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • Nov 10, 2015
    Quiz Created by
    Alice Whinnery

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