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Senior I Financial Wellness

Super Senior I Financial Wellness
by

Aveda Institute Portland

on 21 July 2013

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Transcript of Senior I Financial Wellness

300 850
1~2
Financial Wellness
What to do next...
Overview
Exit Counseling
5 Steps to Repayment
Track Your Loans on NSLDS
Look Into Consolidation
http://www.nslds.ed.gov/nslds_SA/
Know Your Servicer
The National Student Loan Data System, or NSLDS tracks all of your federal student loans until they are paid in full, so you can see how much you owe and to whom. NSLDS receives data from schools, guaranty agencies, and federal loan programs to create a single comprehensive view of your federal student loans.
View Your Loan Detail
Do you feel comfortable with the details of your students loans?

Do you know who your servicer is?

Do you feel confident in your ability to start paying off your student loans in less than a year?
Look at All of Your Options
Source: Great Lakes
https://www.mygreatlakes.org/borrower/fiq/repayment-step2decide.html
Cons:
Higher interest rate
More interest paid
Loss of benefits
Longer life of the loan
Resources
www.NSLDS.ed.gov

www.LoanConsolidation.ed.gov

www.Studentaid.ed.gov
If you ever find yourself...
unemployed
in the military
back in school
employed in public service
...ask about a
DEFERMENT
.
A
DEFERMENT
is a period during which repayment of the principal and interest of your loan is temporarily delayed.
Consequences of Defaulting
Defaulting on your federal student loans (failing to make a payment for 270 days) has serious consequences.
Default can be avoided by calling your lenders or servicers.
Remember, they want to see you succeed.
Credit Smarts
Questions
Check NSLDS
Call and set up an online account with your servicer
BIG PICTURE
Set Up A Repayment Plan
Start Repayment
The
N
ational
S
tudent
L
oan
D
ata
S
ystem
http://www.nslds.ed.gov/nslds_SA/SaPrivacyConfirmation.do

www.myedaccount.com




www.mygreatlakes.org





www.myfedloan.org
WHY set up an online account?

Review your loan totals, accrued interest, and other account details

Explore different repayment plans

See if you are eligible for deferment and/or forbearance

Make online payments

See your current and past messages and eStatements
Let's Calculate!
Group A:
Standard Repayment Plan

Student Name:
Antoinette Beenders
Total Loan Amount Taken:
$30,000
Monthly Payment:
$345.25
Loan Repayment Period:
10 Years
Annual Interest Rate:
6.8%

What is Antoinette's Total Loan Repayment Amount?

How much did Antoinette pay in interest over the life of her loan?
Group B:
Extended Repayment Plan

Student Name:
Allen Ruiz
Total Loan Amount:
$30,000
Monthly Payment:
$208.23
Loan Repayment Period:
25 Years
Annual Interest Rate:
6.8%

What is Allen's Total Loan Repayment Amount?

How much did Allen pay in interest over the life of his loan?
Let's Calculate!
Group A:
Standard Repayment Plan

What is Antoinette's Total Loan Repayment Amount?
$41,430.30

How much did Antoinette pay in interest over the life of her loan?
$11,429.30

- Higher monthly payment
BUT
+ Lower Total Interest Payment
Group B:
Extended Repayment Plan

What is Allen's Total Loan Repayment Amount?
$62,468.57

How much did Allen pay in interest over the life of his loan?
$32,467.57


+ Lower monthly payment
BUT
- Higher Total Interest Paid
Didn't like calculating by hand?
No Problem! There are tons of Loan Repayment Calculators available.

http://studentaid.ed.gov/repay-loans/understand/plans/standard/comparison-calculator
HEN?
Pros:
Smaller payment
One monthly payment
Single servicer
What is it?
A Direct Consolidation Loan allows you to consolidate (combine) multiple federal student loans into one loan.

Do I have to?
NO! Depending on your situation, there are other options you might consider. To get more information visit: http://www.loanconsolidation.ed.gov/

How do I apply?
Online or paper form. Go to http://www.loanconsolidation.ed.gov/.

When are my payments due?
Your loan servicer will let you know when the first payment is due.
HY?
Repayment is required after your grace period
Grace period = 6 months after your leave school
Please Note: your grace period can change if you are in active duty, return to school or consolidate
Incentives: setting up automatic payments can reduce your overall interest

Tax Benefits: You may be able to deduct interest you pay on a qualified student loan

Helps Build Good Credit: This is long term debt from a reliable lender
Life Happens
OBJECTIVES
$1,000,000,000,000
$18,600
$9,200,000,000
You have two options:
How do I request a
DEFERMENT
?

Contact your servicer!

If you are requesting a deferment because you are back in school, you will also need to contact your current financial aid office.
If
DEFERMENT
isn't an option, look into
FORBEARANCE
.

With
forbearance
, you may be able to stop making payments or reduce your monthly payment for up to 12 months.

Interest will continue to accrue on your subsidized and unsubsidized loans (including all PLUS loans).
How do I request a
FORBEARANCE
?

You must apply by making a request to your loan servicer. In some cases, you must provide documentation to support your request.
It will be reported to credit bureaus, making it harder to get a loan for a car or a home
Your federal income tax refund can be intercepted and applied to your loans
A portion of your wages can be held by your employer and applied to your loans
You'll be ineligible for deferments and forbearances, as well as future financial aid
You might receive calls from collection agencies at home or work and you'll be assessed significant collection fees
If you have a professional license from a state agency, it may not be renewed
Your school may withhold services such as official transcripts or letters of recommendation
The federal government may pursue litigation against you
What is a
Credit Score
?
Your
credit score
determines the likelihood that you will pay back your loans and be approved to take out new ones
Future Loan Approval
Interest Rate Eligibility
Housing (Mortgage and Security Deposits)
Employment
Good Debt V. Bad Debt
Good Debt:
The debt that will grow in value, such as a home, education, or investments

Bad Debt:
The debt taken to purchase items that decrease in value (depreciate). In other words, "if it won't go up in value or generate income, you shouldn't go into debt to buy it."
What determines your
credit score
?
How do I improve my
credit score
?
Dispute mistakes on your credit report
Make payments on time
Establish a long-term account
ex. student loans
Don't take on more debt than you can repay
Don't get caught up in credit repair scams
Why is my
credit score
so important?



www.nelnet.com




www.salliemae.com





www.edfinancial.com
How do I check my
credit report
?
You can get one free credit report every twelve months from each of the nationwide credit bureaus--Equifax, Experian, and TransUnion
Equifax: www.equifax.com
Experian: www.experian.com
TransUnion: www.transunion.com
Soft Inquires V. Hard Inquires
Soft Inquires:
A credit report check that does not affect an individual's credit score.
Individual checks on your own credit report
Credit checks by employers
Hard inquiries:
Can sometimes temporarily lower an individual's credit score because the credit bureaus see a consumer's recent applications for new credit as a potential risk
Individual applies for credit by filling out a credit card application
Individual applies for a mortgage, auto loan or any number of other activities.
Debt Ratio
This portion of your credit score refers to credit card debt only.
If you have a group of credit cards with limits that add up to say $10,000 and the outstanding balance on all the cards amounts to $5,000, then you have a 50% debt to credit limit.
Credit Length
This portion looks at how long your credit accounts have been established, including:
the age of your oldest account, the age of your newest account and an average age of all your accounts
how long specific credit accounts have been established
how long it has been since you used certain accounts
Repayment Smarts
Servicers
Consolidation
Repayment Plans
Time Frames
Deferment
Forbearance
Default
Credit Smarts
Let's Calculate!
Group A
Forbearance on Subsidized Loan

Anna Wintour
Loan Amount:
$11,000
Annual Interest Rate:
3.4%
Length of Forbearance:
1 Year

How much interest accrued in one year?
Group B
Forbearance on Unsubsidized Loan


Anna Wintour
Loan Amount:
$15,000
Annual Interest Rate:
6.8%
Length of Forbearance:
1 Year

How much interest accrued in one year?
Group A
Forbearance on Subsidized Loan

Anna Wintour
How much interest accrued in one year?
$374
Let's Calculate!
Group B
Forbearance on Unsubsidized Loan


Anna Wintour
How much interest accrued in one year?

$1,020
Added together that is
$1,394
!
It is like taking out an additional loan
OR
like buying a tall flavored latte everyday for a year.
Changed Your Repayment Plan and Still Having Trouble Making Payments?

www.myedaccount.com




www.mygreatlakes.org





www.myfedloan.org
Full transcript