14
QuizMultiple Choice

Employment and Education — Quiz

Question 14 • Personal Finance and Economics

One reason a student may seek a federal student loan instead of a private student loan is that

Answer
A
federal loans must be paid back more quickly than private loans.
B
federal loans are obtained by banks, while private loans are backed by the government.
C
private loans carry a higher interest rate than federal loans.
D
private loans are only available to parents, while federal loans may be issued to the student.

Explanation

Federal student loans often have lower, fixed interest rates and more borrower protections than private loans. Private loan rates can vary and may be higher, so a student may prefer a federal loan. The other choices reverse how the loans work or incorrectly describe repayment rules.

AI-written and checked against the verified answer.

Previous
Next