Entrance Counseling (Fed Student Loans)

The Direct Loan Program offers the following types of loans:

Direct Subsidized Loans are for students with financial need. T or F?

You may decline any portion or all of a loan you do not need. T or F?

Before accepting a loan you should: a. Calculate your expenses and your resources. Use these figures to help you determine how much you really need to pay for your education. b. Identify non-loan sources of financial assistance. c. Look for ways to increase your income, decrease your expenses, or both. d. All of the above.

You must repay the full amount of your loans. T or F?

You may use your loan money only to pay for authorized educational expenses at the school that certified your loan eligibility. T or F?

Your signature on the MPN allows your school to make multiple loans to you under a single promissory note. T or F?

To take out a Direct Loan for the first time, you must complete a Master Promissory Note (MPN). T or F?

For each loan that you receive under an MPN, you'll receive a disclosure statement that gives you specific information about that loan. T or F?

The MPN is a legal document in which you promise to repay your loan(s) and any accrued interest and fees. T or F?

Which of the following are true? a. If the loan disbursement amount exceeds school charges, the remaining balance of the disbursement will be paid to you. b. You will be notified in writing each time your school disburses a portion of your loan. c. Both a and b d. Neither a nor b

When you are notified each time your school disburses a portion of your loan, the notification includes which loan funds are subsidized and which are unsubsidized. T or F?

For Direct Subsidized Loans and Direct Unsubsidized Loans, there are limits on the maximum amount you may borrow in total for undergraduate and graduate study (aggregate loan limits). T or F?

The actual amount you receive for an academic year may be less than the maximum annual amounts. T or F?

For Direct Subsidized Loans and Direct Unsubsidized Loans, there are limits on the maximum amount you may borrow for an academic year (annual loan limits). T or F?

Your disclosure statement shows the loan's actual interest rate. T or F?

All Direct Subsidized Loans and Direct Unsubsidized Loans have a fixed interest rate. T or F?

Capitalization increases the unpaid principal balance of your loan, and we will then charge interest on the increased principal amount. This can substantially increase the total amount you repay over the life of your loan. T or F?

Which of the following are true? a. Direct Subsidized Loans made to graduate or professional students have a fixed interest rate of 6.8%. b. Direct Unsubsidized Loans made to all students (undergraduate and graduate/professional) have a fixed interest rate of 6.8%. c. Both a and b.

We charge a loan fee (also called an origination fee) on Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans. T or F?

For Direct Subsidized Loans and Direct Unsubsidized Loans, the loan fee varies depending on the first disbursement date of the loan. T or F?

It is your responsibility to contact your Direct Loan servicer and your school if you stop attending school or drop below half-time enrollment. T or F?

A scheduled break in enrollment, such as the summer session at many traditional 4-year schools, is not considered an interruption in your enrollment if you are planning to return to school during the next regularly scheduled enrollment period. T or F?

You can change repayment plans at any time. T or F?

You must repay the full amount of each Direct Loan you receive, plus interest. T or F?

Which of the following is true? a. A repayment incentive is a benefit (such as a reduced interest rate) that is offered to encourage you to repay your loans on time. b. Your Direct Loan servicer can tell you if any repayment incentive programs are available. c. Both of the above d. Neither of the above.

Your Direct Loan servicer has options that may help you if you have trouble making payments. a. True b. False

If you stop making payments your loan could go into default, which has serious consequences. a. True b. False

A possible consequence of default is that the Federal Government can take all or part of your federal tax refund. a. True b. False

Your loan may be discharged if you are determined to be totally and permanently disabled. a. True b. False