LIVE RICHER ACADEMY LIVE FINANCIAL AID STRATEGY SESSION

Transcription

1 LIVE RICHER ACADEMY LIVE FINANCIAL AID STRATEGY SESSION featuring, Financial Aid Expert, ANGELA HOWZE I Angela Howze, Financial Aid Strategist make every effort to ensure an accurate representation of the information provided. My coaching is not intended to represent or guarantee that anyone will achieve a certain desired result. I have committed to evaluate all cases objectively and strategically. Please be advised that individual results may vary.

2 WELCOME!

3 ABOUT ANGELA HOWZE Author, public speaker and financial aid strategist Angela Howze has utilized a wealth of experience to bring vital services to her community. Freeing students and parents from Financial Aid prison and providing people with the futures they deserve, she has been committed to her work for the past 12 years.

4 WHY CONSOLIDATION? There are many reasons why we should consolidate our loans, here are a few: 1. Payment plan 2. Get out of default 3. Strategy to pay off in eliminate in 5 years or less 4. Fixed interest rates

5 MOST FEDERAL STUDENT LOANS ARE ELIGIBLE FOR CONSOLIDATION Direct Subsidized Loans Direct Unsubsidized Loans Subsidized Federal Stafford Loans Unsubsidized Federal Stafford Loans Direct PLUS Loans Supplemental Loans for Students (SLS) Federal Perkins Loans Federal Nursing Loans Health Education Assistance Loans Some existing consolidation loans PLUS loans from the FFEL (Federal Family Education Loan Program)

6 NOTE: Private Education Loans, Spousal Consolidation Loans, and Signature Loans are not eligible for consolidation. For private bank loans, the only way to reduce them is to apply for lesser interest rate or consolidate to a program that will allow you to focus on paying the minimal while tackling the private. Strategizing and deciding with program fits your circumstance is the best decision to make.

7 Case Mary has $120,000 in federal loans and $10,000 in private loans which = $128, Her bring home pay $2, monthly. Her household bills $1, a month which leaves her $1, Point Mary cannot consolidate her private loans but she has a plan from the strategist. Mary will consolidate her direct loans to the extended graduate program and pay $ for 25 years but here is the plan Mary stated she has $ she can spend monthly because her main concern was the private loans that has a really high in interests. Mary will pay her bank $ a month for 2 1/2 years debt paid. Then she will have to decide if she wants to pay her loans off in ten $1100. a month or if she wants to pay for 20 years at $ a month. Also other revenues are available if you re willing to work for it on line or in summer programs. Listed below are programs that can help Mary to repay payoff or eliminate her debt before the 20 year mark

8 1. Apply to become a peer reviewer where you read and learn how to write grants and become a grant writer to make money on the side to eliminate student loan debt. Here is the link nationalservice.gov/vista - summer programs Here s a thought-customer service reps online positions that pays per hour which is extra 2, a month towards student debt or supplemental income.

9 Loan Type Interest Rate Interest Rate Direct Subsidized Loans (Undergraduate) 3.76% 4.29% Direct Unsubsidized Loans (Undergraduate) 3.76% 4.29% Direct Unsubsidized Loans (Graduate) 5.31% 5.84% Direct PLUS Loans (Graduate and Parents) 6.31% 6.84%

10 QUESTION: I got my fed loans in a degree that is not allowing me to make a lot of money, I m making 18,000 a year and I have 48,000 in student loans and I cannot afford the payments. How can I pay off this debt?

11 ANSWER: I would take the loans and place them in the IBR Program where you are not required to pay until you are able to find a job that fits your lifestyle and can pay your bills. However, even if you don t find a job where you can pay it counts towards the 10 year repayment program, and at the end of those 10 years, your debt will be forgiven. Then apply for the AmeriCorps program

12 AMERICORPS VOLUNTEER Offers $5,775 per year of grant monies while allowing you to make a stipend of $800- $1000 a month. Plus, you will attend teacher s workshop, and they will assigned you to a public school for you to learn. When you finished the program you will be ready to take your Praxis 1&2. After you have passed the exams, reevaluate your income and family size. Now you must teach for 5 years and then apply for the teacher s loan forgiveness of $17,000, or join the Standard program and pay your loans off within 10 years. Which will save you 15 years of compounded interests every day with a rate of 4.2% per $10,000.of debt which is equal to % on the dollar which adds to $ per year. At the end of the day, you would have a new career that didn t cost you anything, you have two-three years into standard program and you have $11,000 grant money, $24,000 and stipend monies, which leaves you $13,000 to pay off or continue on with the remaining years of the Standard payment program. Current funding below Round 2: FY 2016 Social Innovation Fund Pay for Success Cooperative Agreement AmeriCorps State and National Grants FY 2017

13 QUESTION: Student has $130,000 in debt and she is attending grad school next year which will cost her another $17,000. What can she do to offset these loans?

14 ANSWER: 1. Go to your Department Chair and ask to join the student graduate assistance ship program that allows you to attend 12 semester hours including books, and it pays $ stipend a month. Also, you have to work 20 hours a week. 2. Apply for this grant The Corporation of National and Community Service: Deadline this grant will allow you to work at church on Sundays, in different auxiliary s, or be a volunteer in a public sector and they will pay up to $5,775 per year. americorps/americorps-programs/americorps-vista/vista-summerassociates 3. Apply for the America Vista grant to earn $11,000 in grant for educational loan repayment and some school will match the tuition forgiveness aspect of it

15 STUDENT LOANS & HOME OWNERSHIP

16 Debt to Income Guidelines are determined by taking your total mortgage payment, referred to as PITI (principle, interest, taxes and insurance) and divide by your total gross monthly income. This is considered to be your front end ratio.

17 Example: $ PITI divided by $ a month = 30% this would be considered your Housing debt ratio. Your back end ratio is determined by adding the rest of your monthly obligations to the PITI amount. So, if you have another $ in monthly payments plus the $ = $ $ total payments divided by $ = 40% So, your ratios would be 30/40.

18 The below are the debt to income ratios for each loan program: USDA 29/41 FHA 29/55 VA 29/55 Conventional 29/45 Please remember that these are the program guidelines but exceptions can be made. If for instance, you have a good deal of liquid assets then you may be able to go above the normal guidelines. Also, if you have a low loan to value then you can go higher on the debt to income. I hope this gives you a benchmark to work with and a clearer understanding of the mortgage process.

19 You can obtain a home with student loan debt. The lenders are looking at how much money you owe out each month, not the balance. So the smart thing to do would be to apply for the extended graduated program with least amount of debt to pay each month and when you receive your form in the mail. Take it to the lender. It s a done deal, providing you have met all of the other qualifications.

20 QUESTION & ANSWER

21 THANKS FOR ATTENDING! FinancicalAidStrategist.com