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Gauge Your Debt

Gauge Your Debt. Taking preventative measures now to avoid HIGH RISK Debt later. Gauge Your Debt. Examine your borrowing pattern Instruments to gauge your debt Take preventative measures with an in-school budget Practice financial fitness Evaluate your repayment options.

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Gauge Your Debt

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  1. Gauge Your Debt Taking preventative measures now to avoid HIGH RISK Debt later.

  2. Gauge Your Debt • Examine your borrowing pattern • Instruments to gauge your debt • Take preventative measures with an in-school budget • Practice financial fitness • Evaluate your repayment options

  3. Examine Your Borrowing Pattern

  4. Examine your borrowing pattern The Cost of Attendance: • Stafford – 6.8% Fixed • Graduate PLUS – 8.5% Fixed

  5. Examine your borrowing pattern • Student #1 is borrowing to Stafford Limit with $5000 Graduate PLUS • Student #2 is borrowing just Stafford loans These examples assume immediate repayment (25 years) after six-month grace period.

  6. Breakdown $20,000

  7. Bottom line is…If you can adjust your budget by $14 a day for the next four years, you could save yourself $58,735!

  8. Instruments to Gauge Your Debt

  9. Estimate Your Monthly Payment(10-year Standard Repayment)

  10. Estimate Your Future Salary Estimate your future salary by visiting: www.salary.com or www.naceweb.org

  11. Gauge Your Debt: How will you fare? Educational Payment as a Percent of Gross Monthly Income Manageable (10% or less) Challenging (between 10% and 18%) Complex (18% or greater)

  12. Take preventative measures with an in-school budget

  13. Budgeting for Success • Prevent financial trouble • Learn how to be a smart consumer • Prepare a secure future by setting and achieving goals

  14. Total the Sources: Employment Personal Savings Family Contribution Financial Aid Disbursements Know the amount and timing of installments Money has to last 12 months even if your academic year is shorter Determine Your Income

  15. Fixed Expenses Tuition Rent/Mortgage Car payments Insurance premiums Child care Cable/Internet Taxes Identify Your Expenses

  16. Variable Expenses Utilities Food Clothing Medical/Dental Household Identify Your Expenses • Transportation • Credit Card Payments Using credit cards is not a good option for covering expenses you cannot handle.

  17. Is Your Budget Balanced?

  18. Practice Financial Fitness

  19. Are You Financially Fit? • Minimize your borrowing to match your future income • Re-evaluate your budget – how much can you save?

  20. Healthy Spending Choices • Skip the coffeehouse latte and brew your own coffee at home • Avoid eating out • Take the bus, carpool, walk or bike rather than drive • Try doing without a convenience expense (text messaging, cable TV, internet service) • Find a roommate or cheaper housing options

  21. Evaluate your Repayment Options

  22. Repayment Options • Extend your repayment term • Choose a graduated repayment plan • Consider Income Based Repayment • Request postponement if necessary

  23. Using your Repayment Options WARNING: Using a non standard repayment plan may cause increased total loan cost.

  24. Gauge Your Debt: How will you fare? Educational Payment as a Percent of Gross Monthly Income Manageable (10% or less) Challenging (between 10% and 18%) Complex (18% or greater)

  25. - Borrow less - Live in moderation - Make (and live by) a budget - Exercise your financial fitness - Plan ahead for the future

  26. Questions? XXXXXXXXX (866) 902-6038 ext. XXXX XXXXXX@theloanprogram.org T.H.E. Website: www.theloanprogram.org Student Blog: www.TheRamenReport.org

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