Smart Tips For The Financially Savvy
Student
PD 120
www.herzing.edu
Successful adults practice responsible
money management:
– Live within your means
– Pay bills on time
– Save/invest money for future goals
– Stay in contact with lenders/creditors
– Negotiate with lenders/creditors if you
experience problems paying
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Why Money Management?
If you
live within your
means…
You will usually
have $ to
pay bills on time
Save extra $
in case something
happens
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Invest extra $
to make more $
If something
happens & you
can’t pay bills
Work with
lenders/creditors
to find a solution
To Live Within Your Means….
•
•
•
•
Figure out what your income is
Figure out what your expenses are
Compare your income with your expenses
If your income is greater than your expenses
– Save or invest the extra money
• If your expenses are greater than your income
– Find ways to cut your spending
– Consider ways to increase your income
– Borrow only what you actually NEED
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Some tips to stretch your money, from
Cash Course:
Don’t let student loans and credit card debt
weigh you down after graduation. The less
you borrow during your college years, the
less you have to pay back! Here are 25 quick
tips to help you stretch your money and leave
college with manageable debt.
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Saving on food
•
•
•
•
Learn to cook
Buy food and supplies in bulk
Use your freezer
Avoid buying sodas and snacks out of
vending machines
• Buy generic
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Kicking a habit
• Quit or reduce your smoking. At about $7 a pack,
smoking is expensive—not to mention the toll it takes
on your lungs. http://www.smokefree.gov/
• Drink less, especially alcohol. The average college
student spends $900 a year on alcohol.
• Make your own coffee at home. At $4 or $5 for a latte,
specialty coffee drinks are pricey. Try to cut back to
once a week, then twice a month. You'll be surprised
how fast it adds up: at $4 a latte, you're spending $28 a
week. If you cut back to once a week, you're saving $24
a week or $1,248 a year!
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Saving on rent
• Add another roommate
• Negotiate rent increases If you've been a good
tenant, paying your rent on time, and taking care of the
property, ask for a break when rent increases occur.
Many property owners will consider dropping an
increase in exchange for knowing they have a good
tenant who will be back next year.
• Turn down the heat
• Cancel cable TV subscription
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Saving on expenses
•
•
•
•
•
Walk or bike when you can
Use public transportation
If you have a car, charge your friends for rides
Pick a cell phone or landline, not both
Use the Web for comparison shopping. If you're
buying something large or small, you can do quick
price checks using Web sites such as Google
Product Search
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Money-saving tips
•
•
•
•
•
•
•
•
Use the library
Shop around for clothes
Avoid clothes that require dry cleaning
Use your student discount
Consider cheaper entertainment
Sponsor a game night
Buy less-expensive gifts
Avoid credit card pushers
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People who take care of their finances wisely
earn good credit ratings which make it easier to
get:
– The kind of home you want
– Credit cards/loans
– Lower interest rates on credit cards/loans
– A better, higher paying job
– Continued eligibility for federal financial aid
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Credit Ratings are Based On:
1.
2.
3.
4.
5.
Previous credit performance
Current level of indebtedness
Time credit has been in use
Types of credit available
Pursuit of new credit
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Graph of Credit Score Factors
Although all these factors are included in credit score calculations, they are
not given equal weighting. The following graph shows how the weighting
breaks down:
5%
35% Previous Credit Performance
30% Current Level of Indebtedness 15%
15% Time Credit has Been in Use
15% Types of Credit Available
5% Pursuit of New Credit
15%
This information comes from “The
Importance Of Your Credit Rating” by
Investopedia Staff, (Investopedia.com)
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35%
30%
Boost Your Credit Rating by:
• Paying off your debts on time
• Borrowing/using credit cards only when you
absolutely need to so your balances are kept
low
• Having a long credit history
• Refraining from frequently applying for
additional credit
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Student Loan Repayment:
• Plays a tremendous role in determining your
credit rating
• Affects your ability to enjoy life - now and in
the future.
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How Will
You
Handle Your
Loans?
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Handling Student Loan Repayment:
Responsibly
Irresponsibly
• Enhances your credit
rating
• Saves you money
• Enhances your chances
of having an enjoyable
life experience
• Destroys your credit
rating
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• Costs you more money
• Causes negative
consequences for years
to come
To successfully navigate student loan
repayment remember:
– Student loans must be paid back
– Payments must be made on time
– Make it easy for your lender to contact you
with reminders, updates, etc.
– There are responsible options available when
you can’t make a payment!
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Sometimes people get into circumstances that
make it difficult or even impossible to keep up
with bill payments:
•
•
•
•
Unemployment or Underemployment
Health Problems
Family Issues
Natural Disasters
–
–
–
–
Flood
Tornado
Fire
Hurricane
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If you are ever unable to make loan
payment, remember:
• Your student loan lender understands this and is willing to
work with you during such situations
• You have the right to request the following solutions that
allow you to make lower payments or even stop making
payments temporarily, or in some cases, permanently:
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–
–
Deferment
Alternative Payment Plan
Forbearance
Consolidation
Loan Forgiveness
Loan Discharge
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Deferment
Deferment means “postponing” or “deferring” your loan
payments until a later date. There are many types of
deferments corresponding to various situations that
might make it hard for a person to make loan payments:
• In School Deferment
• Economic Hardship Deferment
• Unemployment Deferment
• Active Military Deferment
• Peace Corps Deferment
• Rehabilitation Training Deferment
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Alternative Payment Plans
• Standard Repayment
– Higher monthly payment
– Shorter repayment period – up to 10 years
– Least amount of accrued interest
• Extended Repayment
–
–
–
–
–
Over 30,000 in Direct Loan debt
Longer repayment period – 25 years
Fixed or Graduated payment options
Higher amount of accrued interest
Lower monthly payments
• Graduated Repayment
– Payments start out low & increase every 2 years
– Shorter repayment period - up to 10 years
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Forbearance
Forbearance is another way of temporarily postponing or
reducing your loan payments. During a forbearance
period:
• Interest will continue to be charged as usual
• You are allowed to stop making payments or make
smaller payments
• Your loan status will be “current”, so there will be no
negative credit reporting
• You will not be getting “collection calls” about the loan
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Consolidation
• If you have many student loans with different
servicers, payment dates and amounts, it can
be hard to keep track of. Consolidation is a
process in which you take out one larger loan
to pay off all of your smaller loans.
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Consolidation Pros & Cons
Advantages
Disadvantages
• Just one monthly
payment
• Lower monthly
payments
• Various repayment
options
• Locking-in current
interest rates
• Longer repayment
period
• Increased total interest
• Potential loss of
deferment or
cancellation eligibility
for some loans
(especially Perkins)
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In some situations you may qualify to have all or part
of your loan eliminated
Loan Forgiveness
Loan Discharge
• Employed full time by a public
service organization
– Federal, State, Local or Tribal
government agencies
– Public Schools/Childcare
– Law Enforcement
– Military Service
– Public Library Services
– And Many Others
• Serving in a full-time
AmeriCorps or Peace Corps
position
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• Suffering from total and
permanent disability
• School closed before you
completed your program
• Your loan was falsely
certified because of identity
theft
Student Loans are
sometimes transferred to
new servicers and it can
be easy to lose track of
them.
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Pay attention to mail from the following
servicers:
•
•
•
•
Great Lakes
Nelnet
Fedloan
Sallie Mae
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Go to http://www.nslds.ed.gov/nslds_SA/
and monitor your loans on the National Student Loan
Database System (NSLDS) for current info:
•
•
•
•
Loan Location
Servicer Contact Info
Loan Status
Loan Amounts
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Default
If you fail to:
• Make payments
- and • Request the appropriate solution in a timely
fashion
Then:
• You will default on your student loan
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Consequences of Default
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•
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•
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Wage garnishment
Withholding of income tax refunds
Loss of federal financial aid eligibility
Difficulty getting a good job
Problems renting an apartment
Trouble getting credit cards/loans
Higher interest rates when you do get credit cards/loans
Numerous collection phone calls and letters
Loss of state occupational license
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Default Hurts
You & Yours
Your school has
already been paid
from your original
loan amount
Your lender will get its money
from the federal government
The government gets money from
American Taxpayers-your friends and
family members who pay taxes on their
hard earned dollars
Defaulting hurts your community and you will likely
suffer the most with many negative consequences
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Thankfully….
It doesn’t have to
happen!
www.herzing.edu
Borrower Support Services Presents: “The Default Destroyers”!
Toll Free Phone Number: 1-866-508-0748 x353
The Default Destroyers put a high powered Borrower Support
Specialist on the job. Armed with one of the many Dazzling
Deferment options, she will work with the borrower to destroy
the chances of suffering the negative consequences of default.
www.herzing.edu
www.herzing.edu
Default Destroyer Jennifer Hoepner
Student Loan Repayment Manager
Phone: (866) 508-0748 x346
Email: jhoepner@herzing.edu
Duties:
• Lead and Support the Default
Destroyers as we help Herzing
student loan borrowers
successfully navigate repayment
• Come up with creative ways to
lower the likelihood of default
across Herzing University
Campuses
www.herzing.edu
Default Destroyer Chue Vang
Borrower Support Specialist
Phone: (866) 508-0748 x224
Email: cvang@herzing.edu
Duties:
• Assist Herzing student loan
borrowers successfully navigate
repayment
• Contact and support borrowers
as they experience difficulties
with respect to repayment
www.herzing.edu
Default Destroyer Marshall J Draper
Borrower Support Specialist
Phone: (866) 508-0748 x363
Email: mdraper@herzing.edu
Duties:
• Assist Herzing student loan
borrowers successfully navigate
repayment
• Contact and support borrowers
as they experience difficulties
with respect to repayment
www.herzing.edu
Default Destroyer Erin Dowe
Borrower Support Specialist
Phone: (866) 508-0748 x362
Email: edowe@herzing.edu
Duties:
• Assist Herzing student loan
borrowers successfully navigate
repayment
• Contact and support borrowers
as they experience difficulties
with respect to repayment
www.herzing.edu