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Lesson plan · Money After High School · Lesson 9

Student Loans

Federal vs. private loans, interest, and repayment options.

  • 45 minutes
  • Grades 9–12
  • Beginner
  • Activity: pairs
Present slidesWorksheet + keyStudent lesson

Objectives

Students will be able to:

  • Compare federal and private student loans
  • Explain subsidized vs. unsubsidized interest and capitalization
  • Estimate monthly payments and total interest on student loans

Materials

Standards

National Standards for Personal Financial Education (2021)
Managing Credit
Texas TEKS §113.76 Personal Financial Literacy and Economics
  • (3) The student recognizes the costs and benefits of various types of postsecondary education and training throughout the student's lifetime.
  • (7) The student understands the costs and benefits of borrowing.

Topic-level alignment by FLC. How we map standards

Key vocabulary

Capitalization
When unpaid interest is added to your loan balance. After that, you pay interest on the interest.

Background reading

The official sources this lesson is based on.

45-minute agenda

  1. 0–5 min

    Warm-up

    Post: “Is borrowing for college “good debt”? What would make it good or bad?”

  2. 5–12 min

    Direct instruction

    Present the lesson slides. Make sure students leave with these points:

    • Federal first, private last.
    • Subsidized: no interest in school. Unsubsidized: interest from day one.
    • Capitalized interest grows your balance.
    • Borrow less than your expected first-year salary.
    • Rules change — check studentaid.gov.

    Use the “See it” slide (Total interest on a 10-year loan at a hypothetical 6.5%) to make the idea visual.

  3. 12–17 min

    Worked example

    Walk through “Interest while you're in school” on the slides. Pause before the result and ask students to predict it.

  4. 17–22 min

    Live demo

    Project student loan calculator from the slides or the Loan Calculator. Change one input at a time and have students call out what they think will happen.

  5. 22–32 min

    Borrow Smart

    Format: pairs · 10 minutes

    1. Using the loan calculator at a hypothetical 6.5% for 10 years, pairs find the monthly payment and total interest on $30,000 and on $20,000.
    2. Pairs compare each payment to a starting salary of $45,000 (about $3,750 a month before taxes).
    3. Pairs apply the guideline: borrow less in total than your expected first-year salary.

    What to look for: $30,000: $340.64/month, $10,877 interest. $20,000: $227.10/month, $7,252 interest. Both are under a $45,000 first-year salary, but the lower amount leaves much more room in the budget.

  6. 32–37 min

    Check for understanding

    Use the question slides — or run them as a Four Corners game. Questions:

    1. What's a key difference between subsidized and unsubsidized federal loans?
    2. Why do many experts suggest federal loans first?
    3. Capitalized interest is added to your loan balance, so you then pay interest on it.

    Sign in as a teacher to see the answers.

  7. 37–42 min

    Discussion

    • How would you decide how much is too much to borrow for college?
    • Should colleges be required to show expected graduate salaries next to their prices?

  8. 42–45 min

    Exit ticket

    Prompt: What's the difference between subsidized and unsubsidized federal loans?

    Answer: Sign in as a teacher to see the answers

Differentiation

Common misconception

“Student loans can be forgiven, so the amount doesn't matter.” Forgiveness programs have strict rules; most borrowers repay in full.

Support

Provide a step-by-step for using the loan calculator with a screenshot.

Extension

Check current federal student loan interest rates on studentaid.gov and recalculate the $30,000 example.

Homework or make-up work

Students can complete the full interactive lesson — including its knowledge check — at learnwithflc.org/courses/money-after-high-school/student-loans. No account needed; progress saves on their device.