International Baccalaureate (IB) Practice Exam

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What is the average repayment period for a student loan?

5 years
10 years
20 years
15 years

The correct answer is: 10 years

The average repayment period for a student loan is 10 years, which is commonly established as a standard term for federal student loans in many regions, particularly in the United States. This timeframe allows borrowers to manage their repayment in a structured manner, balancing the need to pay off their debt while allowing sufficient time for financial stability. In contrast to shorter repayment periods, a 5-year term might impose a heavier burden on monthly payments, making it difficult for recent graduates to manage their finances effectively as they transition into the workforce. A 15-year or 20-year repayment plan, while offering lower monthly payments, generally leads to more interest paid over the life of the loan, impacting the overall cost significantly. The 10-year repayment plan offers a viable middle ground, allowing graduates to repay their loans without extending the debt burden unnecessarily.