5
QuizMultiple Choice

Employment and Education

Question 5 • * HSA 26-27 Economics

What is one benefit of privately issued student loans?

Answer
A
They are issued in cooperation with the student’s university to reduce costs and paperwork.
B
They have lower interest rates and can be paid back with lower out-of-pocket costs.
C
They are backed by the US government to ensure greater financial security.
D
They are available to any student who meets lending standards, regardless of financial need.

Explanation

Privately issued student loans are made by banks or other private lenders, which generally set eligibility using their own lending standards, such as creditworthiness. Unlike federal loans, they are not backed by the U.S. government and are not necessarily based on financial need. So the benefit described is that they may be available to students who meet a lender’s standards regardless of financial need.

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