1. Cornerstone: Creating Success through Positive Change 6th edition

2. (In class activity)
What percentage of your income should you spend on must haves, wants, & savings/debt?
How much credit card debt does the average household have?
What percentage of American families spend more than they have each year?
T/F Marrying someone with good credit will improve your credit score.

3. 50/30/20%
$8,000
43%
No, but…

4. Practicing Fiscal Fitness
Managing money is a challenge for many students
Will you have to work to finance your education?
Do you need to change your financial habits?
Copyright © 2011 by Pearson Education, Robert M. Sherfield & Patricia G. Moody, Cornerstone: Creating Success Through Positive Change, 6th Edition, Chapter 11, Slide 2

5. Young Adults and Debt Nearly 50% have defaulted on a debt
30% worry frequently about debt
58% move in with parents after college
22% altered career plans due to debt
Average credit card debt is now over $4,000
% of income is spent on debt payments
Bankruptcy is a major issue for young adults
Copyright © 2011 by Pearson Education, Robert M. Sherfield & Patricia G. Moody, Cornerstone: Creating Success Through Positive Change, 6th Edition, Chapter 11, Slide 3

6. Preparing for the Future
Practice delayed gratification
Take a personal finance course
Learn financial lingo
Save your change daily
Write down everything you spend
Apply for all types of financial aid
Copyright © 2011 by Pearson Education, Robert M. Sherfield & Patricia G. Moody, Cornerstone: Creating Success Through Positive Change, 6th Edition, Chapter 11, Slide 4

7. Match the word with the correct definition.
Low-interest subsidized loan based on need. Must be half time.
A need based grant awarded to undergraduates with no other degree.
Low interest loan to qualified parents of students.
Need based grant awarded to institutions to distribute accordingly.
Unsubsidized low-interest loan-you don’t have to show need.
Unsubsidized Stafford loan
Federal Supplemental Educational Opportunity Grant
PLUS Loan
Pell Grant
Stafford loan

8. Types of Financial Aid Loans – must be repaid with interest
Grants – do not require repayment and are often need-based
Scholarships – do not require repayment and are often merit-based
Work study – money earned while working on campus
Copyright © 2011 by Pearson Education, Robert M. Sherfield & Patricia G. Moody, Cornerstone: Creating Success Through Positive Change, 6th Edition, Chapter 11, Slide 5

9. Are you Eligible for Federal Aid?
Demonstrate financial need?
Have high school diploma or GED?
Enrolled in an eligible degree program?
Citizen of U.S. with a SS#?
Making satisfactory academic progress?
Male registered with Selective Service?
Any drug convictions?
Copyright © 2011 by Pearson Education, Robert M. Sherfield & Patricia G. Moody, Cornerstone: Creating Success Through Positive Change, 6th Edition, Chapter 11, Slide 6

10. Some Tips for Applying Complete your FAFSA/TAFSA in its entirety
Read instructions carefully and attend to deadlines
Be honest and supply any documentation required
Keep tax returns and forms organized
Work with Financial Aid Officers on campus
Apply for all types of aid
Copyright © 2011 by Pearson Education, Robert M. Sherfield & Patricia G. Moody, Cornerstone: Creating Success Through Positive Change, 6th Edition, Chapter 11, Slide 7

11. Student Loans Required for many college students
Borrow only the minimum you need
This debt will follow you for up to 30 years
Bankruptcy does not relieve student loan debt
Copyright © 2011 by Pearson Education, Robert M. Sherfield & Patricia G. Moody, Cornerstone: Creating Success Through Positive Change, 6th Edition, Chapter 11, Slide 8

12. Undergrad Debt
Institution Level & Control
Percent Borrowing
Cumulative Debt
Overall Total (4, 2 and < 2 year)
58.8%
$18,625
   Public
49.4%
$16,369
   Private Non-Profit
69.7%
$26,683
   Private For-Profit
93.1%
$17,162
4-year Total
66.5%
$22,656
   4-year Public
61.1%
$19,839
   4-year Private Non-Profit
70.6%
$27,349
   4-year Private For-Profit
97.0%
$24,635
2-year Total
44.8%
$12,307
   2-year Public
37.2%
$10,444
   2-year Private Non-Profit
64.0%
$14,790
   2-year Private For-Profit
97.6%
$17,310
< 2-year Total
74.7%
$10,172
   < 2-year Public
36.1%
$10,321
   < 2-year Private Non-Profit
45.0%
$10,990
   < 2-year Private For-Profit
86.0%
$10,123

13. Institution Control and Degree Program
Percent Borrowing
Average Cumulative Debt
Median Cumulative Debt (Just Borrowers)
Median Cumulative Debt (All Students)
Bachelor's Degree
65.2%
$23,118
$19,999
$10,500
   Public
61.2%
$20,040
$17,500
$6,998
   Private Non-Profit
70.5%
$27,535
$22,374
$16,115
   Private For-Profit
96.0%
$32,909
$32,625
$31,186
Associate's Degree
47.1%
$13,289
$10,000 $0
38.9%
$10,574
$7,668
71.1%
$19,294
$16,130
97.8%
$19,681
$18,783
$18,415
Certificate
63.2%
$11,302
$9,000
$4,804
32.0%
$9,754
$6,625
49.5%
$15,071
89.9%
$11,573
$9,858
$8,797

14. Useful Links
Fin Aid Data Fin Aid

15. Scholarship Searches Assignment #3
HCC Scholarships

16. Scholarship Search Assignment # 3
1. Scholarship Search (choose either option) Search for scholarships on any of the provided websites and choose either assignment. A- 2 Applied scholarships (proof) B- 3 Possible Scholarships & HCCS Foundation Essay ( )

17. HCCS Foundation Essay Requirements
No longer than two double-spaced, typed pages in 12-point font with one-inch margins. Essays that are not formatted correctly will not be accepted. No exceptions will be made.
Your essay must discuss all of the following:
Your background, including any struggles or successes;
Educational and career goals;
How a scholarship will help you achieve your goals;
Why you deserve a scholarship; and
Any personal information that you want to be considered.

18. Pay off your debt quickly!
Amount Borrowed
Your Interest Rate
Total Years to Repay
Monthly Payment
Total Interest Paid
$5,000 7% 10
$58.05
$1,966.00 20
$38.76
$4,302.40 30
$33.27
$6,977.20

19. Protect Your FICO Score
Monitor your credit report regularly
Keep credit card balances low
Ask card companies for lower credit rates
Do not open multiple accounts at once
Keep accounts in good standing open
Use automated payment systems for bills
Keep balance transfers to a minimum
Copyright © 2011 by Pearson Education, Robert M. Sherfield & Patricia G. Moody, Cornerstone: Creating Success Through Positive Change, 6th Edition, Chapter 11, Slide 9

20. Impact of FICO Score on Home Buying
Interest Rate
Payment
30 Years of Interest
500
9.3%
$1651
$394,362
560
8.5%
$1542
$355,200
620
7.3%
$1373
$294,247
675
6.1%
$1220
$239,250
700
5.6%
$1151
$214,518

21. How Can you Budget in each Area?
Household expenditures?
Utilities?
Phone/ costs?
Transportation costs?
Food?
Copyright © 2011 by Pearson Education, Robert M. Sherfield & Patricia G. Moody, Cornerstone: Creating Success Through Positive Change, 6th Edition, Chapter 11, Slide 10

22. Credit Card Debt One of worst kinds of debt
Majority of college students have this debt
Credit card issuers love college students!
Paying with plastic results in more spending
High interest and fees add up quickly
Can you pay off what you spent each month?
Copyright © 2011 by Pearson Education, Robert M. Sherfield & Patricia G. Moody, Cornerstone: Creating Success Through Positive Change, 6th Edition, Chapter 11, Slide 11

23. Tips for Managing Credit Cards
Only use one card
Watch for changes in fees and interest rates
Your credit score can affect your rates
Avoid cards with annual fees
Know grace periods and payment due dates
Protect your card with signature and “see ID”
Make more than just minimum payments
Try debit cards instead
Seek reputable counseling if in trouble
Copyright © 2011 by Pearson Education, Robert M. Sherfield & Patricia G. Moody, Cornerstone: Creating Success Through Positive Change, 6th Edition, Chapter 11, Slide 12

24. Analyze Credit Assignment #2

25. 3. Minimum monthly payment amount or percentage 4. Late fee amount
1. Interest rate (including promotional lower rates for the first X number of months, regular rate, varying rate)
2. If there is a grace period for 100% monthly payoff if paid in full with no interest
3. Minimum monthly payment amount or percentage
4. Late fee amount
5. Annual credit card fee
6. Promotional bonuses (e.g. cash back percentage, airline miles, etc.)
7. 2 Other positive features
8. 2 Other negative features
9. Fees and special interest rates for cash advances
10. Is this a good card, why or why not?

26. Personal Loan Pitfalls
Watch out for high-interest:
Payday loans
Car title loans
Rent-to-own contracts
Worse than credit cart debt –read carefully!
Copyright © 2011 by Pearson Education, Robert M. Sherfield & Patricia G. Moody, Cornerstone: Creating Success Through Positive Change, 6th Edition, Chapter 11, Slide 13

27. Watch Small Item Money Drain
Gum?
Bottled water?
Eating out daily?
Junk food/vending machines?
Unused memberships?
Expensive salon visits/treatments?
Cigarettes?
Copyright © 2011 by Pearson Education, Robert M. Sherfield & Patricia G. Moody, Cornerstone: Creating Success Through Positive Change, 6th Edition, Chapter 11, Slide 14

28. Identity Theft Widespread concern for college students
Actual or virtual information may be stolen
People you know or strangers may commit it
Very expensive and time-consuming to fix
Copyright © 2011 by Pearson Education, Robert M. Sherfield & Patricia G. Moody, Cornerstone: Creating Success Through Positive Change, 6th Edition, Chapter 11, Slide 15

29. Tips to Minimize Your Risk
Carry only necessary personal information
Buy online from secured sites only
Don’t use obvious passwords
Memorize PIN numbers and passwords
Shred personal documents
Monitor your credit report
Protect personal information online
Use a permanent mailing address
Copyright © 2011 by Pearson Education, Robert M. Sherfield & Patricia G. Moody, Cornerstone: Creating Success Through Positive Change, 6th Edition, Chapter 11, Slide 16

30. Chapter Review
What is the maximum amount of your income should be spent on debt?
How do subsidized and unsubsidized student loans differ?
What is a credit score and how does it affect you?
How often should you view your credit report?
How many credit cards should you possess?
Copyright © 2011 by Pearson Education, Robert M. Sherfield & Patricia G. Moody, Cornerstone: Creating Success Through Positive Change, 6th Edition, Chapter 11, Slide 18