Answers to Direct Loan Program Sample Test

All tests will include a combination of multiple-choice and scenario-based questions. The following examples are similar in structure and scope to the questions that will appear on the test for this topic.

1.The __________ is the maximum amount a student may borrow for the period of enrollment before considering any additional unsubsidized loan amount.

    • aggregate loan amount
    • annual loan amount
    • remaining loan limit
    • CORRECT: base annual loan limit

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2. Which of these students would be subject to proration of the Direct Loan annual loan limit?

    • Mandy, an undergraduate student who started attending mid-year
    • CORRECT: Franco, an undergraduate student enrolled in a program less than an academic year in length
    • Joe, an undergraduate student enrolled part-time for the fall, winter, and spring quarters
    • Millicent, a doctoral candidate working on her dissertation

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3. For purposes of applying the 150 percent limitation on borrowing Direct Subsidized Loans, a “new borrower” is defined as a student who

    • first enrolled in an eligible program on or after July 1, 2013.
    • borrowed only FFEL loans prior to July 1, 2013.
    • CORRECT: has no outstanding balance on a Federal Family Education Loan (FFEL) Program loan or Direct Loan when receiving a Direct Loan on or after July 1, 2013.
    • has an outstanding balance on FFEL and/or Direct Loans of $10,000 or less on or after July 1, 2013.

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4. The grace period is a period of time following graduation or termination of at least half-time enrollment during which

    • interest accrues at a reduced rate.
    • the federal government makes payments on the borrower’s behalf.
    • CORRECT: payments are not required.
    • partial payments are required.

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5. A borrower who does not select a repayment plan is automatically placed on the __________ repayment plan.

    • CORRECT: standard
    • extended
    • graduated
    • income-based

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6. Entrance counseling is required for graduate PLUS Loan borrowers who have not previously borrowed a

    • Direct Subsidized Loan.
    • Direct Unsubsidized Loan.
    • Federal Family Education Loan.
    • CORRECT: Direct PLUS Loan.

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Publication Date: 2/15/2017

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