Which of the Following Statements About Federal Student Loans Is True Everfi Answers
Federal student loans are a popular option for many students looking to fund their higher education. However, understanding the details and facts about these loans can sometimes be confusing. In this article, we will discuss some of the most important aspects of federal student loans and provide answers to frequently asked questions.
Statement: Federal student loans have fixed interest rates.
True. One of the advantages of federal student loans is that they offer fixed interest rates. This means that the interest rate on your loan will remain the same throughout the life of the loan, providing stability and predictability in your monthly payments.
Statement: Federal student loans offer flexible repayment options.
True. Federal student loans offer various repayment plans, allowing borrowers to choose the option that best fits their financial situation. These plans include standard repayment, graduated repayment, income-driven repayment, and extended repayment. Each plan has its own eligibility criteria and payment terms, giving borrowers the flexibility they need.
Statement: Federal student loans offer deferment and forbearance options.
True. Federal student loans provide deferment and forbearance options for borrowers who are facing financial difficulties. Deferment allows you to temporarily postpone your loan payments, usually due to enrollment in school, unemployment, or economic hardship. Forbearance, on the other hand, allows you to temporarily reduce or pause your loan payments due to financial difficulties, such as medical expenses or a job loss.
Statement: Federal student loans offer loan forgiveness programs.
True. There are several federal loan forgiveness programs available to help borrowers manage their debt. These programs include Public Service Loan Forgiveness (PSLF), Teacher Loan Forgiveness, and Income-Driven Repayment Plan Forgiveness. Each program has its own eligibility requirements, so it’s important to research and understand the specific criteria for each program.
Statement: Federal student loans do not require a credit check.
True. Unlike private student loans, federal student loans do not require a credit check. This makes them accessible to a wider range of borrowers, regardless of their credit history or score. However, certain federal loans, such as PLUS loans, may require a credit check, but the criteria are less strict compared to private loans.
Now, let’s address some frequently asked questions about federal student loans:
1. How do I apply for federal student loans?
To apply for federal student loans, you must complete the Free Application for Federal Student Aid (FAFSA) online at fafsa.ed.gov.
2. Can I apply for federal student loans if I am an international student?
No, federal student loans are only available to U.S. citizens and eligible non-citizens.
3. Do federal student loans have a grace period?
Yes, federal student loans typically have a grace period of six months after you graduate, leave school, or drop below half-time enrollment. During this period, you are not required to make loan payments.
4. Can I consolidate my federal student loans?
Yes, federal student loan consolidation allows you to combine multiple federal loans into a single loan, with a fixed interest rate. This can simplify repayment and potentially lower your monthly payments.
5. Are federal student loans eligible for forgiveness after a certain number of years?
Yes, some federal loan forgiveness programs, such as Public Service Loan Forgiveness, forgive the remaining loan balance after a certain number of qualifying payments and years of service.
6. Can I refinance my federal student loans with a private lender?
Yes, it is possible to refinance federal student loans with a private lender. However, by doing so, you will lose the benefits and protections offered by federal loans, such as income-driven repayment plans and loan forgiveness options.
7. Do federal student loans have a maximum borrowing limit?
Yes, federal student loans have annual and lifetime borrowing limits. The exact limits depend on factors such as your year in school, dependency status, and whether you are a dependent or independent student.
8. Can I use federal student loans to pay for living expenses?
Yes, federal student loans can be used to cover not only tuition and fees but also living expenses, such as housing, transportation, and books.
9. Can I change my repayment plan after I have started making loan payments?
Yes, you can change your federal student loan repayment plan at any time. However, certain plans may have specific requirements or restrictions, so it’s important to understand the implications before making a change.
10. Can I transfer my federal student loans to someone else?
No, federal student loans cannot be transferred to another person. The borrower is solely responsible for repaying the loan.
11. Can I receive federal student loans for online or distance learning programs?
Yes, federal student loans can be used to fund online or distance learning programs that are offered by eligible institutions.
12. Can my federal student loans be discharged in bankruptcy?
In most cases, federal student loans cannot be discharged in bankruptcy. However, there are some exceptions for borrowers who can prove undue hardship, although they are rare.
In conclusion, federal student loans offer numerous benefits and options for borrowers, such as fixed interest rates, flexible repayment plans, and loan forgiveness programs. Understanding the true statements about federal student loans can help students make informed decisions about their education financing.