Presentation on theme: "Www.herzing.edu Smart Tips For The Financially Savvy Student PD 120."— Presentation transcript:
Smart Tips For The Financially Savvy Student PD 120
Successful adults practice responsible money management: – Live within your means – Pay bills on time – Save/invest money for future goals – Stay in contact with lenders/creditors – Negotiate with lenders/creditors if you experience problems paying
Why Money Management? If you live within your means… You will usually have $ to pay bills on time Save extra $ in case something happens Invest extra $ to make more $ If something happens & you cant pay bills Work with lenders/creditors to find a solution
To Live Within Your Means…. Figure out what your income is Figure out what your expenses are Compare your income with your expenses If your income is greater than your expenses – Save or invest the extra money If your expenses are greater than your income – Find ways to cut your spending – Consider ways to increase your income – Borrow only what you actually NEED
Some tips to stretch your money, from Cash Course: Dont let student loans and credit card debt weigh you down after graduation. The less you borrow during your college years, the less you have to pay back! Here are 25 quick tips to help you stretch your money and leave college with manageable debt.
Saving on food Learn to cook Buy food and supplies in bulk Use your freezer Avoid buying sodas and snacks out of vending machines Buy generic
Kicking a habit Quit or reduce your smoking. At about $7 a pack, smoking is expensivenot to mention the toll it takes on your lungs. Drink less, especially alcohol. The average college student spends $900 a year on alcohol. Make your own coffee at home. At $4 or $5 for a latte, specialty coffee drinks are pricey. Try to cut back to once a week, then twice a month. You'll be surprised how fast it adds up: at $4 a latte, you're spending $28 a week. If you cut back to once a week, you're saving $24 a week or $1,248 a year!
Saving on rent Add another roommate Negotiate rent increases If you've been a good tenant, paying your rent on time, and taking care of the property, ask for a break when rent increases occur. Many property owners will consider dropping an increase in exchange for knowing they have a good tenant who will be back next year. Turn down the heat Cancel cable TV subscription
Saving on expenses Walk or bike when you can Use public transportation If you have a car, charge your friends for rides Pick a cell phone or landline, not both Use the Web for comparison shopping. If you're buying something large or small, you can do quick price checks using Web sites such as Google Product SearchGoogle Product Search
Money-saving tips Use the library Shop around for clothes Avoid clothes that require dry cleaning Use your student discount Consider cheaper entertainment Sponsor a game night Buy less-expensive gifts Avoid credit card pushers
People who take care of their finances wisely earn good credit ratings which make it easier to get: – The kind of home you want – Credit cards/loans – Lower interest rates on credit cards/loans – A better, higher paying job – Continued eligibility for federal financial aid
Credit Ratings are Based On: 1.Previous credit performance 2.Current level of indebtedness 3.Time credit has been in use 4.Types of credit available 5.Pursuit of new credit
Graph of Credit Score Factors Although all these factors are included in credit score calculations, they are not given equal weighting. The following graph shows how the weighting breaks down: 35% Previous Credit Performance 30% Current Level of Indebtedness 15% Time Credit has Been in Use 15% Types of Credit Available 5% Pursuit of New Credit This information comes from The Importance Of Your Credit Rating by Investopedia Staff, (Investopedia.com)Investopedia.com
Boost Your Credit Rating by: Paying off your debts on time Borrowing/using credit cards only when you absolutely need to so your balances are kept low Having a long credit history Refraining from frequently applying for additional credit
Student Loan Repayment: Plays a tremendous role in determining your credit rating Affects your ability to enjoy life - now and in the future.
How Will You Handle Your Loans?
Handling Student Loan Repayment: Responsibly Irresponsibly Enhances your credit rating Saves you money Enhances your chances of having an enjoyable life experience Destroys your credit rating Costs you more money Causes negative consequences for years to come
To successfully navigate student loan repayment remember: – Student loans must be paid back – Payments must be made on time – Make it easy for your lender to contact you with reminders, updates, etc. – There are responsible options available when you cant make a payment!
Sometimes people get into circumstances that make it difficult or even impossible to keep up with bill payments: Unemployment or Underemployment Health Problems Family Issues Natural Disasters – Flood – Tornado – Fire – Hurricane
If you are ever unable to make loan payment, remember: Your student loan lender understands this and is willing to work with you during such situations You have the right to request the following solutions that allow you to make lower payments or even stop making payments temporarily, or in some cases, permanently: – Deferment – Alternative Payment Plan – Forbearance – Consolidation – Loan Forgiveness – Loan Discharge
Deferment Deferment means postponing or deferring your loan payments until a later date. There are many types of deferments corresponding to various situations that might make it hard for a person to make loan payments: In School Deferment Economic Hardship Deferment Unemployment Deferment Active Military Deferment Peace Corps Deferment Rehabilitation Training Deferment
Alternative Payment Plans Standard Repayment – Higher monthly payment – Shorter repayment period – up to 10 years – Least amount of accrued interest Extended Repayment – Over 30,000 in Direct Loan debt – Longer repayment period – 25 years – Fixed or Graduated payment options – Higher amount of accrued interest – Lower monthly payments Graduated Repayment – Payments start out low & increase every 2 years – Shorter repayment period - up to 10 years
Forbearance Forbearance is another way of temporarily postponing or reducing your loan payments. During a forbearance period: Interest will continue to be charged as usual You are allowed to stop making payments or make smaller payments Your loan status will be current, so there will be no negative credit reporting You will not be getting collection calls about the loan
Consolidation If you have many student loans with different servicers, payment dates and amounts, it can be hard to keep track of. Consolidation is a process in which you take out one larger loan to pay off all of your smaller loans.
Consolidation Pros & Cons Advantages Disadvantages Just one monthly payment Lower monthly payments Various repayment options Locking-in current interest rates Longer repayment period Increased total interest Potential loss of deferment or cancellation eligibility for some loans (especially Perkins)
In some situations you may qualify to have all or part of your loan eliminated Loan Forgiveness Loan Discharge Employed full time by a public service organization – Federal, State, Local or Tribal government agencies – Public Schools/Childcare – Law Enforcement – Military Service – Public Library Services – And Many Others Serving in a full-time AmeriCorps or Peace Corps position Suffering from total and permanent disability School closed before you completed your program Your loan was falsely certified because of identity theft
Student Loans are sometimes transferred to new servicers and it can be easy to lose track of them.
Pay attention to mail from the following servicers: Great Lakes Nelnet Fedloan Sallie Mae
Go to and monitor your loans on the National Student Loan Database System (NSLDS) for current info:http://www.nslds.ed.gov/nslds_SA/ Loan Location Servicer Contact Info Loan Status Loan Amounts
Default If you fail to: Make payments - and - Request the appropriate solution in a timely fashion Then: You will default on your student loan
Consequences of Default Wage garnishment Withholding of income tax refunds Loss of federal financial aid eligibility Difficulty getting a good job Problems renting an apartment Trouble getting credit cards/loans Higher interest rates when you do get credit cards/loans Numerous collection phone calls and letters Loss of state occupational license
Default Hurts You & Yours Your school has already been paid from your original loan amount Your lender will get its money from the federal government The government gets money from American Taxpayers-your friends and family members who pay taxes on their hard earned dollars Defaulting hurts your community and you will likely suffer the most with many negative consequences
Thankfully…. It doesnt have to happen!
Borrower Support Services Presents: The Default Destroyers! Toll Free Phone Number: x353 The Default Destroyers put a high powered Borrower Support Specialist on the job. Armed with one of the many Dazzling Deferment options, she will work with the borrower to destroy the chances of suffering the negative consequences of default.
Default Destroyer Jennifer Hoepner Student Loan Repayment Manager Phone: (866) x346 Duties: Lead and Support the Default Destroyers as we help Herzing student loan borrowers successfully navigate repayment Come up with creative ways to lower the likelihood of default across Herzing University Campuses
Default Destroyer Chue Vang Borrower Support Specialist Phone: (866) x224 Duties: Assist Herzing student loan borrowers successfully navigate repayment Contact and support borrowers as they experience difficulties with respect to repayment
Default Destroyer Marshall J Draper Borrower Support Specialist Phone: (866) x Duties: Assist Herzing student loan borrowers successfully navigate repayment Contact and support borrowers as they experience difficulties with respect to repayment
Default Destroyer Erin Dowe Borrower Support Specialist Phone: (866) x362 Duties: Assist Herzing student loan borrowers successfully navigate repayment Contact and support borrowers as they experience difficulties with respect to repayment