College Benefits: Beyond Earnings - Managing Student Loans and Post-High School Expenses

1. Consumer Education and Training Services Tony Leahy, Executive Director Josh Feinstein, Seattle University Law School United States Bankruptcy Court Western District of Washington Judge Karen A. Overstreet

2. Presenters • Judge Karen A. Overstreet, United States Bankruptcy Court • Judge Brian D. Lynch, United States Bankruptcy Court • Josh Feinstein, CENTS • Tony Leahy, Executive Director, CENTS

3. College benefits go beyond earnings In addition to earning more, college-educated Millennials also have lower unemployment and poverty rates than their less-educated peers. They’re also more likely to be married and less likely to be living in their parent’s home.

4. Now the bad news! • Outstanding student loan balances reported on credit reports increased to $1.08 trillion (+$53 billion) as of December 31, 2013, representing a $114 billion increase for 2013. • About 11.5% of student loan balances are 90+ days delinquent or in default.

5. Paying For Post-High School Education

6. Choose major/career Salary Per Year Salary Per Month Multiply by .75 Take Home Per Year Take Home Per Month

7. INCOME RESOURCES • College Salary Report: Payscale: • http://www.payscale.com/college-salary-report/majors-that-pay-you-back/bachelors • National Association of Colleges and Employers: • http://time.com/money/3829776/heres-what-the-average-grad-makes-right-out-of-college/

8. Select 3-5 colleges • College Navigator • http://nces.ed.gov/collegenavigator/

9. Research Your School! • Accredited? • Who accredits it? • Retention and graduation rate? • Compare schools

10. Default rates • What does it mean? • Compare schools

11. Cost to graduate- tuition

12. Cost to graduate- living expenses • College Board’s research tables- by region • Moderate and low budget • 2015-16 Seattle-Tacoma • $25,000 and $17,000 • https://professionals.collegeboard.org/higher-ed/financial-aid/living-expense/12-month

13. Total college expense • Tuition • Living expenses • Total amount you need to finance

14. Student loans • Federal vs. private loans • Types of federal student loans • https://studentaid.ed.gov/sa/repay-loans/understand/plans#estimator • Subsidized vs. unsubsidized

15. Student loan payments • Identify current interest rate • Standard plan 120 months repayment • Monthly payment • Total to pay off loan • Change interest rate • Change loan term: Extended plan • Monthly payment • Total to pay off loan • http://www2.ed.gov/offices/OSFAP/DirectLoan/calc.html

16. Spending percentages • Student loan monthly payment amount divided by Take Home Earnings Per Month, then multiply by 100= % • $1,092 monthly payment divided by Take Home Earnings Per Month X 100= 26% • 26% of your monthly take home pay will go toward paying off your student loan

17. Effect on monthly budget • Higher student loan payments take from other areas of your budget • Housing • Transportation • Food • Entertainment/shopping • Savings • Vacations

18. Troubleshooting • Borrowing less (Principal reduction) • Grants and scholarships • Work study and/or job • Living at home/cutting down living expenses • Gap year