PRESCRIPTION FOR FINANCIAL WELLNESS: Developing financial skills applicable for all stages of life

Transcription

1 PRESCRIPTION FOR FINANCIAL WELLNESS: Developing financial skills applicable for all stages of life

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3 ARE YOU CONCERNED ABOUT MANAGING YOUR DEBT AFTER GRADUATION? A. Yes, I am very concerned B. I am somewhat concerned, but feel I will be able to successfully manage my debt C. I am not at all concerned D. I was not concerned before today, but I am now! 0 of 30 0% 0% 0% 0% A. B. C. D. 3

4 -Alexandra Stoddard 4

5 PRESCRIPTION FOR FINANCIAL WELLNESS: FINANCIAL LITERACY PROGRAM Orientation Term 3 Prior to Graduation Term 1 Term 6 5

6 OVERVIEW Understanding Total Loan Costs DVM Cost of Attendance and Student Budget Budgeting Your Student Loan Funds Options For People Who Don t Like to Budget Navigating NSLDS & studentloans.gov Useful Tips & Resources 6

7 WHAT IS THE MEDIAN DEBT LEVEL OF US LOAN BORROWERS IN THE 2017 DVM GRADUATING CLASS? (COMBINATION OF FEDERAL AND PRIVATE LOANS) A. $181,598 B. $274,959 C. $298,347 D. $331,653 0 of 30 0% 0% 0% 0% 7 A. B. C. D.

8 UNDERSTANDING TOTAL LOAN COSTS The True Cost of Borrowing

9 LOAN INTEREST Student loan interest accrues daily the day it's disbursed until the day your loan balance reaches zero A simple interest rate formula is used to calculate daily interest accrual: Interest rate current principal balance # days in the year Federal student loan interest rates Unsubsidized Loan: 6.0% Grad PLUS Loan: 7.0% 9

10 LOAN INTEREST CONTINUED Interest rate x current principal balance number of days in the year = daily interest Example: You have a $12,619 Grad PLUS loan disbursed this term with a 7.0% interest rate this year. Using the formula, your daily interest accruing on this loan is:.07 x $12, = $

11 WHAT S THE IMPACT? If you continue to borrow at this level $2.42 Daily Accumulated Interest amount $883 Interest accrued each year on THIS LOAN ONLY $2,113 Interest accrued each year on Unsubsidized and Grad PLUS $8,452 Amount accrued at graduation prior to capitalization REMEMBER: There will be 8 more terms of loans to consider 11

12 INTEREST CAPITALIZATION The practice of adding unpaid interest charges to the principal balance of an educational loan, thereby increasing the size of the loan Interest is then charged on the new balance, which includes both the unpaid principal and the accrued interest 12

13 Enters Repayment Exits any status in which interest is accruing Exits Deferment Fail to submit documentation required to renew participation in repayment plan on time Loan Interest Capitalization Repayment plan changed by borrower Exits Forbearance 13

14 DVM COST OF ATTENDANCE AND STUDENT BUDGET 14

15 ESTIMATED SUMMARY: VETERINARY MEDICAL SCHOOL COSTS Tuition and Fees: $ 180,930 Living Expenses: $ 109,156 Total Estimated Cost of Attendance: $ 290,086* Median SGU Borrower Student Loan Debt: $ 274,959** *Based on current rates for DVM program to be completed in 4 calendar years; subject to change **Academic Year 2017 DVM Graduates; Includes private, federal and institutional loans 15

16 WHAT DOES BORROWING TOTAL COA LOOK LIKE AT REPAYMENT? 16

17 School Type Race Age UNTIL I HAD TO START PAYING BACK MY LOAN, I DIDN T THINK ABOUT HOW I WAS GOING TO AFFORD IT. Total White Non-White Public Private 49% 48% 45% 56% 46% 56% 49% 48% 21% 30% 19% 33% 23% 32% 22% 22% 22% 32% 18% 26% 20% 31% 21% 31% Agree Strongly/Somewhat Neutral Disagree Somewhat/Strongly Across the board, about half of all people surveyed did not think about loan repayment ahead of time 17

18 BUDGETING YOUR STUDENT LOAN FUNDS 18

19 BUDGET AND LOAN REFUND ESTIMATE TERM 1 Estimated Loan Refund = Net Loan Disbursement Total Billed Expenses + Any payments made to account (Deposit, etc.) The information above outlines the estimated Cost of Attendance for the Basic Science terms based on rates. To be used for informational purposes only. 19

20 REDUCE YOUR STUDENT LOAN DEBT Are you able to live comfortably off of your 1 st loan refund? Do you have funds left over at the end of the term? If yes, borrow less! Return loan funds up to 120 days after disbursement Reduce future disbursements 20

21 THE REAL COST OF KEEPING $1,000 Amount Saved Each Term $1,000 Number of terms in DVM Program 9 Total Gross Amount Saved ($1,000 * 9) $9,000 Interest Saved Year 1 Loans ($2,000 * 7%)* 4 $ Interest Saved Year 2 Loans ($2,000 * 7%)* 3 $ Interest Saved Year 3 Loans ($2,000 * 7%)* 2 $ Interest Saved Year 4 Loans ($3,000 * 7%)* 1 $ Total Interest Saved over 4 years $1, TOTAL AMOUNT SAVED WHILE IN SCHOOL $10,

22 FIND EASY, REALISTIC WAYS TO SAVE Food Books/Supplies Rent/Housing Transportation Grocery shop once a week Buy local brands Pre-plan meals Cook in bulk Bring from home Purchase electronic textbooks or used from upper-termers Rent books you won t need again later Get a roommate! Turn off air conditioning while in class Use WIFI to stream entertainment (no cable, etc.) Shop EARLY for flights Use the bus system! 22

23 BUDGETING IN SIMPLE TERMS 23

24 MANAGING YOUR FINANCES RESPONSIBLY: HOW TO CREATE A REALISTIC BUDGET Prioritize what s in your budget to see where you can make cuts Cut out what you really don t need in order to start saving money Create a conscious spending plan Build rewards into your budget e.g., eat out every other week Stay disciplined Try to make budgeting a part of your daily/monthly routine 24

25 BUDGET SPREADSHEET 25

26 MANAGING YOUR MONEY Ex: After billed expenses (tuition, fees, books, housing, health insurance) ~$6,137 for 4 months of expenses $6,137 fully transferred to Savings Account Allocate money for airfare (i.e. $1,000) Using remainder, set up automatic monthly transfers of $1,284 to Checking Account Food: $500 Entertainment: $200 Miscellaneous: $584 Automatic transfers help you stay on budget and earn some interest 26

27 OPTIONS FOR PEOPLE WHO DON T LIKE TO BUDGET 27

28 THE ENVELOPE SYSTEM Decide how much you want to spend in major categories each month (not sure? Start with one: Eating out) Put money in each envelope (category): $200 - Groceries $150 Eating Out $60 - Entertainment You can transfer from one envelope to another.. $100 - Groceries $250 Eating Out But when the envelopes are empty, that s it for the month 28

29 ADDITIONAL OPTIONS Set up calendar alerts Remind yourself when bills are due to avoid late fees Automatic Payments Payments automatically withdrawn from checking account each month Using a single credit or debit card Track expenses monthly Reports and analytics often provided online 29

30 PERSONAL FINANCE APPS AND SOFTWARE Easily track expenses, set goals, and understand where your money is going Mint You Need a Budget Wally Pocket Guard Acorns, etc. 30

31 NAVIGATING NSLDS & STUDENTLOANS.GOV 31

32 NSLDS FEDERAL LOAN SUMMARY nslds.ed.gov 32

33 NSLSC CANADIAN FEDERAL LOANS 33

34 STUDENTLOANS.GOV Log in with FSA ID Grad/Professional Students section 34

35 STUDENT LOAN REPAYMENT ESTIMATOR 35

36 USEFUL TIPS & RESOURCES 36

37 BANKING TO YOUR BENEFIT Research all different types of checking / savings accounts Compare benefits know what is available to you Charles Schwab High Yield Investor Checking Account* No minimum account balance or monthly fees No foreign transaction fees or ATM fees Will refund any third-party ATM fees charged Bank of America* ScotiaBank International Partner ATM s Avoid Non-BOA $5 usage fee and any ATM operator access fee *For informational purposes only. SGU does not endorse any of these institutions or products 37

38 AVMA PERSONAL FINANCE TOOL Available free to all current AVMA members Input and save personal and professional expenses, bills, student loan debt, etc. View personal year to year comparisons Set up strategic planning to pay down debts and save for the future Compare your financial situation with other DVM professionals around the country Online video overview of Finance Tool on YouTube 38

39 STUDENT LOAN PREPAYMENT CALCULATOR Student Loan Prepayment Calculator Shows the impact of making regular extra payments Amount of interest savings and the number of payments saved 39

40 SGU CARENAGE: FINANCIAL AID RESOURCES Tools to allow you to financially plan and manage your student loans and personal finances efficiently and effectively PDF s, videos, and recorded webinars that cover a wide range of financial aid topics Financial Literacy Personal finances Budgeting Money-saving websites Financial Aid Resources: 40

41 OLLOW US ON FACEBOOK! SGU Financial Aid deadline reminders and important information Useful tips and tools for personal money management Relevant news articles regarding student loans and overall financial well-being Financial Aid Counselor Contact information and useful website links 41

42 PERSONAL FINANCE RESOURCES AND BIBLIOGRAPHY

43 FINANCIAL AID COUNSELORS ON CAMPUS Individual financial aid appointments available weekdays through Friday, March 23rd Located in Housing office Top floor of St. George s Hall Make your appointment online calendly.com/sgufinaid 43

44 WHO DO I CONTACT IF I HAVE FINANCIAL QUESTIONS? Free Phone Available in Housing office! 44

45 COURSE UNIT EVALUATION SURVEY Very brief, 8 question survey Assists us in developing content for students that is both relevant and easy to understand Complete online at: 45