FINANCIAL BASICS FOR DVM STUDENTS

FINANCIAL BASICS FOR DVM STUDENTS

OVERVIEW Understanding Total Loan Costs Borrowing from your Future Self DVM Cost of Attendance and Student Budget Budgeting Your Student Loan Funds Navigating NSLDS & studentloans.gov Useful Tips & Resources 2

WHAT IS THE MEDIAN DEBT LEVEL OF US LOAN BORROWERS IN THE 2016 DVM GRADUATING CLASS? (COMBINATION OF FEDERAL AND PRIVATE LOANS) A. $181,598 B. $270,091 C. $298,347 D. $317,742 25% 25% 25% 25% A. B. C. D. 3

UNDERSTANDING TOTAL LOAN COSTS The True Cost of Borrowing

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 2016 2017 Federal student loan interest rates Unsubsidized Loan: 5.31% Grad PLUS Loan: 6.31% 5

LOAN INTEREST CONTINUED Interest rate x current principal balance number of days in the year = daily interest Example: You have a $12,791 Grad PLUS loan disbursed this term with a 6.31% interest rate this year. Using the formula, your daily interest accruing on this loan is:.0631 x $12,791 365 = $2.21 6

WHAT S THE IMPACT? If you continue to borrow at this level $2.21 Daily Accumulated Interest amount $807 Interest accrued each year on THIS LOAN ONLY $1,896 Interest accrued each year on Unsubsidized and Grad PLUS $7,582 Amount accrued at graduation prior to capitalization REMEMBER: There will be 8 more terms of loans to consider 7

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 8

INTEREST CAPITALIZATION Enters Repayment Exits any status in which interest is accruing Exits Deferment Repayment plan changed by borrower Loan Interest Capitalization Exits Forbearance Fail to submit documentation required to renew participation in repayment plan on time 9

DVM COST OF ATTENDANCE AND STUDENT BUDGET 10

VETERINARY MEDICAL SCHOOL COSTS Tuition and Fees: $ 180,930 Living Expenses: $ 109,223 Total Estimated Cost of Attendance: $ 290,153* Median Debt Level - Loan Borrowers: $ 270,091** *Based on current 2016-17 rates for DVM program to be completed in 4 calendar years; subject to change **Median debt level of loan borrowers, 2016 graduating DVM class. Private and federal loans. 11

WHAT DOES BORROWING TOTAL COA LOOK LIKE AT REPAYMENT? 12

BUDGETING YOUR STUDENT LOAN FUNDS 13

SCHOOL OF VETERINARY MEDICINE BUDGET TERM 1 Estimated Loan Refund = Total Financial Aid Eligibility (COA) Total Billed Expenses Loan Fees + Any payments made to account (i.e. deposit) 1 st Refund (Received): $2,807 2 nd Refund (3/17/17 Disb.): $2,807 Total Refund: $5,614 The information above outlines the estimated Cost of Attendance for the Basic Science terms based on 2016-17 rates. To be used for informational purposes only. 14

LIVE IN THE MOMENT, PLAN FOR THE FUTURE Review your available funds and work backwards Create a conscious spending plan You don t necessarily have to cut ALL expenses as long as you are spending within your means i.e., You don t want to give up morning coffee, find other areas to cut back on so you remain within budget for the term 15

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! 16

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 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 17

MANAGING YOUR MONEY Ex: After billed expenses (tuition, fees, books, housing, health insurance) ~$5,614 for 4 months of expenses $5,614 fully transferred to Savings Account Allocate money for airfare (i.e. $1,000) Using remainder, set up automatic monthly transfers of $1,153 to Checking Account Food: $400 Entertainment: $200 Miscellaneous: $553 Automatic transfers help you stay on budget and earn some interest 18

BUDGET SPREADSHEET Budgeting Worksheet This worksheet will help you start thinking about your budget. If you fill in your resources, it will also help you to figure out how much you need to borrow from unsubsidized loan funds. If you have any questions, please contact your counselor. Non-Monthly Expenses Annual Resources Tuition & fees Personal savings Books/supplies/instruments Student/spouse income Health Insurance Parent/family help Board fees Investment income Car taxes/maintenance Gifts Gifts Government checks Other: School scholarship(s) Other scholarship(s) Monthly Expenses School loan Rent/mortgage Other: Home/renter's insurance Electricity Total Resources $0.00 Gas (heat) Water/Sewer Remaining Need* $0.00 Cable/satellite Telephone Cell phone Other utilities: Car payment Gas (for auto) Car insurance Other insurance: Other debt payment: Child care Groceries Meals/snacks away from home Household supplies Clothing Laundry/dry cleaning Parking & tolls Medical/dental/prescriptions Hobbies/recreation Travel Pet supplies Health & Beauty, Haircuts Cigarettes, tobacco, alcohol Music and movies Charities/contributions Other: Other: # of months 12 Total Expenses $0.00 19

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 20

REDUCE YOUR STUDENT LOAN DEBT Were you able to live comfortably off of your 1 st loan refund? If yes, borrow less! Return loan funds up to 120 days after disbursement Reduce future disbursements 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 * 6.31%)* 4 $504.80 Interest Saved Year 2 Loans ($2,000 * 6.31%)* 3 $378.60 Interest Saved Year 3 Loans ($2,000 * 6.31%)* 2 $252.40 Interest Saved Year 4 Loans ($3,000 * 6.31%)* 1 $189.30 Total Interest Saved over 4 years $1,325.10 TOTAL AMOUNT SAVED WHILE IN SCHOOL $10,325.10 22

NAVIGATING NSLDS & STUDENTLOANS.GOV 23

NSLDS FEDERAL LOAN SUMMARY nslds.ed.gov 24

STUDENTLOANS.GOV Log in with FSA ID Grad/Professional Students section 25

REPAYMENT ESTIMATOR 26

USEFUL TIPS & RESOURCES 27

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 28

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 29

UTILIZE FREE RESOURCES Mint Access via internet or mobile app Connects with your bank, investment, and other accounts to track and analyze monthly expenses Create a personalized budget based on your actual spending Reminds you when bills are due, if you were charged a fee, and if you have exceeded a spending goal Allows you to pay immediately or schedule a bill payment Student Loan Prepayment Calculator Shows impact of making regular extra payments Amount of interest savings and the number of payments saved 30

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: https://mycampus.sgu.edu/web/financial-aid/financial-aid-resources1 31

OLLOW US ON FACEBOOK! www.facebook.com/sgufinaid 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 32

PERSONAL FINANCE RESOURCES AND BIBLIOGRAPHY

WHO DO I CONTACT IF I HAVE FINANCIAL QUESTIONS? Free Phone Available in Housing office! 34