Financial Education Know Before You Owe. Holly Wright UM Financial Education Program Manager

Transcription

1 Financial Education Know Before You Owe Holly Wright UM Financial Education Program Manager

2 1) Your Questions Can Be Answered Federal Student Aid Process Student Loans Personal Finance Budgeting Credit Score Manage Checking/Savings Accounts FRE E

3 2) All Federal Aid is Determined By Your FAFSA The FAFSA is open and will use your 2016 taxes. The FAFSA opened on October 1st and will use your 2017 taxes.

4 3) Accept the Free Aid First Free Money: Grants, Scholarships Earned Money: Work-Study Borrowed Money: Loans

5 4) If You Have To Accept A Loan, Subsidized Loans Are Best Types of Loans: Subsidized (5.045%), Unsubsidized (5.045%), Parent PLUS (7.595%)

6 5) You Can Accept A Portion of Your Loan

7 6) Decide Now How Much You Are Willing To Borrow For Your Education $20,000? $30,000? $50,000? Make sure your borrowing patterns will total this amount and no more by the time you graduate. Go to a Loan Calculator to see what your payments would be BEFORE you accept a loan

8 7) Do Not Spend Your Refund Check on Non-School Related Items You should not spend your student loan money on TVs, vacations, pets, snowmobiles, etc..

9 8) Once You Get Your Aid, You Need To Keep It Attend your classes Pass your classes Finish your degree in a timely manner

10 9) There Are Caps To The Federal Loans You Can Borrow Dependent Undergraduates: $31,000 Independent Undergraduates: $57,500 Graduate or Professional Students: $138,500

11 10) If you Choose a Private Student Loan, Know the Terms Variable interest rates, different repayment/forgiveness options, cosigners required and the Financial Education Program has limited assistance

12 BUDGETING

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14 BUDGETING Budgeting Tools: Increase Income Decrease Expenses Start paying towards your loans while in school! Even if it's only $5/month, get in the habit of making a payment

15 CREDIT When Can you Get a Credit Card Legal age to qualify for a credit card on your own is 18. However, if under 21, you need to have steady source of income Otherwise, you ll have to have someone co-sign with you. Your credit is only built if you are responsible for the account

16 CREDIT CARDS Easy to overuse, easy to have too many, can incur many costly fines What should you look for: What is the interest rate? What is the annual fee? What is the late fee? What is the over-the-limit fee? Do they offer a grace period?

17 Type a quote here Johnny Appleseed

18 Type a quote here Johnny Appleseed

19 Type a quote here

20 CREDIT REPORTS Credit Score: a number that rates how well you handle credit, how much of a risk you are Credit Report: a summary of your financial history. *One in four can have errors*

21 CREDIT SCORE

22 CREDIT SCORE The Higher The Better Ranges from 300 to 850 Above 740: Very good credit history 640 to 740: Average, indicating basically good credit Below 640: Greater credit risk

23 CREDIT SCORE Improve Your Score Pay yours bills on time Establish a relationship with Local Lender (open a checking/ savings account) Establish a credit history (only need 1 or 2 accounts and start small) Apply for a secured loan at a credit union Stop using credit cards and pay down debts (credit is not an extension of your income) Check your credit report and correct any errors Be patient!

24 CREDIT REPORTS Who Can Pull Your Credit Report Those who have a valid reasons: Lender after you filled out a loan application Insurance Company after you apply for policy If you give WRITTEN permission: landlord, employer

25 CREDIT REPORTS Opt-Out of Firm Offers Firm Offers: unwanted credit card offers and insurance quotes Stop or lessen the number you receive by opting out of these prescreened offers for 5 year periods opt out permanently Can lead to identity theft if someone gets a hold of one of your credit card offers, fills it out and starts making purchases

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