1 / 23

Navigating Student Loans: Facts and Tips for Students

Discover key facts and tips on student loans, including costs, repayment options, types of loans, and financial aid guidance for high school students and graduates. Learn about subsidies, parent loans, refinancing, and importance of loan payments.

tack
Download Presentation

Navigating Student Loans: Facts and Tips for Students

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. CFA SOCIETY OF PITTSBURGH Student Loans High School Financial Literacy

  2. STUDENT DEBT The Facts • 44.2 Million Americans have student loan debt. • Delinquency rate is 11.2%. • Since 1980, tuition costs at public universities have risen from $2000 to $9,410…a Jump of 344%! • Average Cost Per Year 4 Year Private: $50,900 • Average Cost Per Year 4 Year Public: $25,290 • So What’s the lesson? • It’s about how much you can afford! • Not about how much you can borrow

  3. Basics of a Loan Basics of a Loan • Lessens the burden of paying cash outright • Personal Loan • How are rates established? • Credit rating is considered: high credit score= low risk! • Variable interest rate loan changes • Payments can also change • Fixed interest rate loans do not change • Fixed Versus Floating

  4. Federal Vs. Private Loans Important to know the difference William D. Ford Direct Loan Program Major Difference= cost and credit scores What’s better? You tell me

  5. Grant, Loan, or Scholarship? • Grants & Scholarships are “gift aid” • Grants are need based • Scholarships are merit based • Can come from the federal government, state government, your college, or private organization • Pell Grants • Unlike a loan, grants and scholarships don’t need to be paid back! • Meet the requirements and deadlines! Thank the donors! How do I Maintain the Scholarship or Grant?

  6. Options for Repayment Methods for Paying Off Loans • Scholarships • Grants • Cash • Other Loans (Not suggested)

  7. Who Else Offers Student Loans? • Many institutions offer loans • Most notable are banks • Discover • SunTrust • Citizens Bank • PNC • Ascent • These are more costly!

  8. Types of Loans

  9. Subsidized Vs. Unsubsidized Subsidized vs. Unsubsidized • Federal government pays the interest for Direct Subsidized Loans • Accrues as soon as it is taken out (just like most loans) • Undergraduates who don’t qualify, may borrow Unsubsidized Loans • No subsidy • How are they Distributed? (In this Order) • Tuition and Fees • Room and Board • Other charges with your permission • These Loans are LEGAL AGREEMENTS • Must sign a Master Promissory Note

  10. Parent PLUS Loan Parent loan for undergraduate students Government backed Enrolled Half-Time Not based upon financial need Parent applies for loan and is responsible for repayment Graduate students may borrow as well

  11. Stafford Loan • Most common type • Backed by US Government • Subsidized and unsubsidized

  12. Stafford Loan cont. Subsidized Unsubsidized No subsidy, payments still deferred Annual limit: $5,500-$12,500 Cannot exceed $138,500 Medical students: $40,500 annually, $224,000 total • Payments upon graduation • Government covers interest (in school) • Family income less than $50,000 • Cannot accrue more than $23000

  13. FAFSA

  14. Free Application for Federal Student Aid • Fill out to determine need!

  15. Where are My Loans!? • Here’s a step-by-step guide • Go to studentloans.gov • Sign in

  16. Where are My Loans cont. 3.View My documents

  17. Where are My Loans cont. Where are My Loans cont. • 4. “Filter by Disclosure Statements” • 5. Click on a year

  18. Where are My Loans cont. • 6. “View and Print Disclosure Statement” • 7. View type of loan, amount, and interest rate!

  19. Where do I Start? How to Apply for Federal Loans • Complete the FAFSA (or renewal FAFSA) • Review Financial Award Letter • Contact School’s Financial aid office • Review and sign paperwork (MPN) *Parental guidance is recommended

  20. I Graduated! Now What? Methods for Paying Off Loans • Compare interest rates • Pay off loans with the highest interest rate first • Make minimum payments on others Refinancing is an Option • Interest rate on a private loan too much? • It’s possible to refinance at a lower rate

  21. Importance of Loan Payments • Ex: Graduate with $25,000 personal loan • Interest Rate: 7.5% • Minimum Payment: $200 per month • Time Period of Repayment: 244 Months (20 years) • Ex: Graduate with $25,000 personal loan • Interest Rate: 7.5% • Chosen Payment: $850 per month • Time Period of Repayment: 32 Months (2.7 years) • Interest Paid Scenario 1: $24,000 • Interest Paid Scenario 2: $2,700

  22. What’s the Point? • Affordability vs Excessive Borrowing • Determining if college is right for YOU

  23. Questions?

More Related