Student Loan Quiz
Before we start: Earnest is Finny's partner that helps students find education loans with lower interest rates. Variable rates start at 1.05% APR if you're enrolled in auto pay. You could also save on interest when you refinance a student loan with Earnest. Variable rates for refinancing start at 1.99% APR with auto pay.
Ready to learn something new about student loans? Within this lesson and quiz, you'll learn the FUNdamentals about student loans, the types of student loans available and the key differences among them. The knowledge you gain here will help you figure out how to manage student debt better!
Take the quiz and find out the key things you need to know about student loans!
Student Loans FAQs
What’s a good student loan calculator?
A good student loan calculator allows you to input all factors that determine how much you will end up paying in principal and interest over time. It will also allow you to add more than one loan and explain how long it takes to pay off all your loans, including how the individual loan interests add up. Typically, good student loan calculators will output the following:
- How much interest you will end up paying over the lifetime of your loan(s)
- Your annual loan balance after repayments
- The total lifetime cost of your student loan(s)
Here are some student loan calculators you should check out:
What’s the difference between government and private student loans?
Private loans are provided by private organizations like banks, fintechs and credit unions, while government loans (e.g., federal loans) are provided by the government and include a lot of benefits like loan forgiveness and income-driven repayment plans.
Federal loans have fixed interest rates, so the interest stays the same until you finish paying off the loan, regardless of how the market rises and falls. With private student loans, you can get a fixed or variable interest rate.
Federal student loans are subsidized, which means that the government pays the interest for you while you are in school.
The biggest benefit of private student loans is that you may qualify for a lower interest rate if you have excellent credit. For government student loans, you don't need a credit score or check to qualify (one exception is PLUS loans).
Should I refinance my student loans?
Refinancing means swapping your existing student loan for a new loan with a lower interest rate. Refinancing your student loan could save you a chunk of money, but it depends on your current situation. Below are factors you should consider before refinancing your loan:
Current loan benefits – you could lose some benefits of your federal student loans (such as loan forgiveness and student loan relief) if you refinance your student loan. If you’re not ready to lose those benefits, refinancing is not for you.
Your credit – you will need a credit score of around 650 or above and a solid income stream to get a good refinancing offer. If your credit or income is not high enough, you could refinance with a co-signer who meets the standard. In that case, your co-signer is legally liable for the loan.
The offer – there is no reason to refinance your student loan if you won't end up paying less in interest. Use a loan calculator to find out how much you will end up saving before refinancing.
What’s student loan forgiveness?
Student loan forgiveness releases you of the commitment to pay part or all of your federal student loan debt. Note that you can get loan forgiveness only on a federal student loan.
If you are employed by a government or not-for-profit, or you teach for 5 years in a low-income school, you may be able to receive loan forgiveness under the Public Service Loan Forgiveness (PSLF) Program.
Broader student loan forgiveness is also an actively debated topic in Washington, DC. There are several proposals on the table, but most of them limit the amount that will be forgiven (e.g., $10K) and apply to federal loans only.
What qualifies you for student loan forgiveness?
Most commonly student loans are forgiven if the borrower winds up working for the government or not-for-profit, or teaches for at least 5 years in a low-income school district.
There are some other student loan forgiveness cases. In situations like disability, closedown of the college, or other circumstances beyond the borrower's control, federal loans could be forgiven. Students who feel misled or defrauded by their educational institution can also apply for loan forgiveness, as long as school’s behavior violates their state law. Students should address their applications to the Department of Education under the ‘borrower defense’ category.
Will student loans be forgiven?
Student loans are usually forgiven for those people working in public service or non-profits. Broader student loan forgiveness is an actively debated topic in Washington, DC. There are several proposals on the table, but most of them limit the amount that will be forgiven (e.g., $10K) and apply to federal loans only.
What is student loan forbearance?
Student loan forbearance is a means to suspend or reduce your student loan repayment temporarily, usually for 12 months or less, during times of financial difficulties. With loan forbearance, you are still required to pay the interest accrued during the period of forbearance (except in certain cases such as the COVID-19 pandemic). Note: forbearance is only a temporary solution for managing your student loan.
Basically, student loan forbearance has two flavors: discretionary and mandatory. Discretionary forbearance means that your loan holder may grant the forbearance, but is not required to do so. It allows you to get a suspension for 12 months on your loan if you can't make your payments because of medical expenses, financial difficulties, employment changes, or other reasons. Should the financial difficulty continue, you can reapply for another 12 months until a cumulative period of three years is reached.
Mandatory student loan forbearance means that your loan holder must grant the forbearance if you provide all supporting documentation (it's legally required to do so).
What are student loan interest rates?
Student loan interest rates vary by level of education and loan provider. Below are interest rates ranges on government and private student loans currently:
Federal student loans (fixed)
- Undergraduate: 2.75%
- Unsubsidized graduate: 4.30%
- PLUS loans: 5.30%
Private student loans
- Fixed: 3.34% - 14.99%
- Variable: 1.04% - 12.40%
Private refi student loans
- Fixed: 2.79% - 8.77%
- Variable: 1.99% – 8.56%