1. What are the differences between a Direct Subsidized Loan and a Direct Unsubsidized Loan?
2. Does Carly have a grace period? When is she expected to start making payments on her student loans?
3. Identify the four basic types of repayment options. What are the features for each repayment plan?
4. How could Carly's student loan debt affect her financial future?
5. What are the monthly expenses that Carly should consider if she plans to live alone in Northern Virginia? If Carly's parents live near her new high school, should she consider moving in with them? Why or why not?
6. Under what circumstances would Carly qualify for deferment? Would the interest on her subsidized loans accrue during the deferment period? How about the interest on her unsubsidized loans?
7. If Carly decides to further her education by enrolling in a graduate program, would she qualify for deferment or forbearance?
8. What are the advantages and disadvantages of loan consolidation? What factors should Carly consider when contemplating consolidation?
9. If Carly suffers financially and has to file for bankruptcy, will her student loan debt be forgiven?
10. Carly plans to get married someday and have children. What options should Carly and her future spouse consider as they plan for their children's education?
11. What would the monthly payments be on Carly's $27,850 loan if the interest rate on the loan was 4.66 percent, assuming monthly payments over a 10-year period? What would be the total amount of interest paid over the life of the loan? Now repeat this, calculating the monthly payments and the total amount of interest paid over the life of the loan, assuming that the interest rate on Carly's loans was 3.86 percent. Repeat this exercise again assuming a 6.00 percent interest rate.
12. Use the Federal Student Aid Repayment Calculator (simply Google "Federal Student Aid Repayment Calculator" to find it) to determine the level of Carly's payments on the $27,850 loan if the interest rate is 4.66 percent and if she is single, has an adjusted gross income (AGI) of $30,000, and lives in Virginia. What are the monthly payments, or the range of payments, for a standard loan repayment, a graduated loan repayment, and an income-based repayment? Click on the "+" sign next to each of them: How much total interest will Carly pay over the life of the loan under each of the three repayment plans mentioned?
Carly Etheridge, who recently graduated from a 4-year public university, is excited to start her new career in the fall as a high school mathematics teacher in Northern Virginia. Her salary will be $37,500. Although Carly received several scholarships and grants each semester in college, she relied on student loans to meet the cost of tuition and other educational expenses. By the time she graduated, Carly had accumulated $27,850 in student loan debt (in both Direct Subsidized and Direct Unsubsidized Loans). As she prepares to live on her own as a first-year teacher, Carly is assessing her present and future financial situations and has several questions about student loans.