How well-informed are
you on student borrowing?
With college around the corner, there’s a lot you’ll need to learn before the learning even begins. Many students depend on student loans to help fund their educations, which is also a learning opportunity – after all, loans are a ubiquitous part of adulthood, from mortgages to car loans and more.
Whatever the case, it’s important to know exactly how student loans work so you can set your budget, make good decisions and come up with a solid repayment plan.
Take our quiz to test your knowledge and ensure you’re set up for a bright financial future.
Which are worth considering, federal loans or private loans?
Federal Loans
Private Loans
Both, but explore federal first
Both, but explore private first
Both federal and private loans are useful financial tools. To be eligible for federal loans and certain merit aid, you must complete the Free Application for Federal Student Aid (FAFSA).
We recommend students use scholarships, grants and federal loans first, as those offer unique benefits to the borrower. Private loans, like those offered by College Ave Student Loans, are one option to help cover the remaining costs you need for school.
Both, but explore federal first.
1 week
24 hours
1 hour
20 minutes
How long does the FAFSA
take to complete?
FAFSA, or Free Application for Federal Student Aid, only takes about one hour to complete, helping match you with federal loans, grants and scholarships you may be eligible to receive. And, it’s free!
Just make sure you apply before the June 30 deadline, and ideally do it as soon as possible when it launches October 1. Some aid is on a first come, first served basis.
1 Hour
5.1% to 8.60%
5.05% to 7.6%
3.06% to 5.5%
2.5% to 3.75%
For the 2018-2019 school year, what was the federal student loan interest range?
All student loans include an interest rate. In the 2018-2019 school year, the average interest rate for federal student loans was between 5.05% and 7.6%. For the 2019-2020, interest rates will decrease to 4.53% to 7.08%.
For private loans, interest rates are based on a credit and income review. If you’re considering private loans, it pays to do your homework and shop around for the lowest interest rates and flexible repayment options on private student loans.
Tip: Applying for a private student loan with a creditworthy cosigner may help you qualify for a lower interest rate. Don’t forget you’ll both be equally responsible to pay back the loan.
5.05% to 7.6%
Six months after graduation
Immediately after graduation
The last year of college
At the start of the loan
When do most student loan payments start?
Most student loans, including federal direct subsidized and unsubsidized loans -- and many private loans, too -- allow a grace period of six months to find a job and settle into your adult life before paying them back.
Keep in mind that interest will still accrue during this time, so the earlier you can begin payments, even as little as $25 a month while in school, can save you money in the long run.
Six months after graduation.
The easiest loan to pay off
Private Loans
The loan with the highest dollar amount
The loan with the highest interest rate
Which loans should
you pay off first?
There are various strategies you can use to pay off your loans, but it will save you the most money to eliminate the loan with the highest interest rate first.
The loan with the highest rate.
$350
$280
$175
$60
What is the average monthly student loan payment?
With the average student owing $25,000 in student loans – and assuming an average 6.8% interest rate and 10-year repayment plan – the average payment is roughly $280 per month.
If you have trouble meeting your minimum loan payments contact your servicer immediately to discuss your situation and try to find a plan. For your federal loans, various income-based repayment plans may be available to allow you to make affordable monthly payments based on what you’re earning.
$280
Loan forgiveness
Default
Repayment
Delinquency
What happens if a loan payment is overdue?
Missing a loan payment will result in delinquency. After 270 days of delinquency, a federal student loan will go into default. For most private loans, check with your lender. Always try to make your payments on time to avoid delinquency or default, which can hurt your credit.
Consider signing up for auto-pay for each loan through your student loan servicers. You'll often get a discount on your interest rate when you’re making automatic payments, and you’ll know that your payments are being made on time each month.
Delinquency
Loan Whiz
Congrats! You really know your loans. Whether you’ve done this before or have studied up already, we’re confident in your ability to secure, understand and pay back those student loans!
Learn even more about student loans for your education at
collegeavestudentloans.com.
Aspiring Loan Master
You may not be an expert, but your knowledge is promising. With some more time and research, you’ll be a loan whiz yet.
Check out collegeavestudentloans.com for more resources
to get you to loan mastery.
More to learn
While you put in a good effort, you could definitely learn a little more when it comes to student loans — especially if you plan to take them out yourself!
Find out more about the student loan process
at collegeavestudentloans.com.
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RESULTS
Know Your Loans