\fYou work in your college's nancial aid ofce, and Mary Lou Hennings, a junior, has come to you for advice. She just found out that her father has been "downsized" from his job. To ensure that she has sufcient funding for her senior year, she needs to apply for a loan to help with expenses. She has a part-time job with take-home pay of $400 per month. She expects her annual net earnings to be approximately $29,000 after graduation, and she plans to continue living at home for another year or two. Her parents have told her she can use up to $10,000 of their home equity line of credit; however, she is not sure she wank to do that. She does not have any debt. except for 2 more years of monthly auto payments of $189. She is worried about trying to pay for an additional loan while still in school, although her dad is convinced he will nd anotherjob soon and be able to make up the payments. a. Explain the difference between a Direct Subsidized Loan and a Direct Unsubsidized Loan to Mary Lou. b. What types of student loans are available to Mary Lou, and what lending limits apply? c. Assume her student loan will have an interest rate of 6 percent and her parents' home equity line has a rate of 9.75 percent. If both loans have a 10-year maturity, what will her monthly payment be on $4.000, ignoring any possible deferments? d. Explain the tax consequences of the two options, assuming Mary Lou is in the 25 percent marginal federal tax bracket and her parents are in the 28 percent tax bracket. No state income tax is assessed. 9. Using her current income, calculate her debt limit ratio for the most expensive school loan and her auto loan during the school year. Using her projected income, calculate her debt limit ratio for the loans after graduation. f. If Mary Lou suffers nancially and has to le for bankruptcy, will her student loan debt be forgiven? 9. Considering all available information, which loan would you suggest to Mary Lou? Why? Are lhere olher options for nancing her education? Click on the table icon to view the MILPF table a. Explain the difference between a Direct Subsidized Loan and a Direct Unsubsidized Loan to Mary Lou. (Select all the choices that apply.) A. A major difference between Direct Subsidized and Direct Unsubsidized loans is that subsidized loans do not accrue interest while the student is in school or during the grace period. B. A major difference between Direct Subsidized and Direct Unsubsidized loans is that subsidized loans accrue interest while the student is in school or during the grace period. C. Unsubsidized loans accrue interest from the day they are awarded. and students can either pay the interest as they go or let it accrue until the end of their grace period. Students must demonstrate nancial need for Unsubsidized loans but not for subsidized loans. D. Unsubsidized loans accrue interest from the day they are awarded, and studens can either pay the interest as they go or let it accrue until the end of their grace period. Studenm must demonstrate nancial need for subsidized loans but not for Unsubsidized loans. b. What types of student loans are available to Mary Lou? (Select the best answer below.) O A. Mary Lou can apply for either the Federal Direct Loan or the Direct PLUS Loans for Parents. 0 B. Mary Lou cannot apply any loans because student loans are only for incoming freshmen, and she is a junior. 0. Mary Lou can apply for either the Federal Direct Loan or the Stafford Loan. 0 D. Mary Lou can apply for either the Direct PLUS Loans for Parents or the Stafford Loan