UNL Student - PowerPoint Presentation

Slide1

UNL Student Money Management Center

Money SmartSlide2

Introduction

Erin Wirth, Accredited Financial

Counselor

Peer

Money CoachesDr. Kathy Prochaska-Cue, Program AdvisorPh.D., Accredited Financial Counselor, Extension Family Economist

Outstanding

Planning Education & Financial Counseling Center

Building

a

Financial Education Brand & Marketing

CommunicationsSlide3

Why Are We Here?

Committed to encouraging students to take responsibility for their financial futures

Students to build good relationships with money

Students

have confidence in their financial futures

Are

able to meet their

financial goals

Creating

and upholding a culture of financial empowerment among the student body through financial education

 Slide4

Personalized Money Management Sessions

One-on-One Money Management

Coaching Sessions

With an Accredited Financial Counselor or

Peer Money Coach, a UNL StudentCommon Session Topics:* Spending Plans * Financial Goals* Organizing Finances

* Establishing Credit* Saving Money

* Debt Repayment* Investment Education

* Understanding Financial Aid* Selecting Employee Benefits* Major Purchases Slide5

Introduction

Purpose: To

inform you how we answer your students’ financial questions.

To give you some reminders about financial education so if your students come to you with financial questions, you’ll be prepared.

The 6 $$$ Questions We Get Asked Most by UNL FreshmenSlide6

Stories from UNL Parents

Remember:

You are a great educational resource for your students

By talking about your financial mistakes, you can help prevent your student from making the same mistakes

Know financial mistakes don’t mean you raked up huge debt or foolishly spent your money NOT getting basic financial education is a mistake!Slide7

#1 UNL Freshman FAQs

It’s always in the media that students are in lots of debt. How can I minimize my debt load?Slide8

Checklist for Minimizing Debt

EVERY YEAR!

Complete the Free Application for Federal Student Aid at

:

http://www.fafsa.ed.gov/* Will need parents tax information* Can use IRS data retrieval process* Do

this close to Jan. 1st

Some

need is first-come, first-serve UNL Will Inform You What You Qualify

For

Will

be listed at: https://myred.nebraska.eduUnderstand How Many Grants & Scholarships

You

Are

Getting

Financial

aid you DO NOT pay

back

ONLY BORROW WHAT YOU NEED!Slide9

UNL Costs

Costs

Resident

Non-Resident

Credit Hour

$216

$660.25

Business$268

$817.25

Engineering

$309.50

$860

Architecture

$292

$844

Fees Per Class

$11.35

$11.35

Programs & Facilities

Fees

(per semester)

$557

$557Slide10

Checklist for Minimizing Debt

Look At SUBSIDIZED Loans

= 3.86% AND Perkins Loans = 5%

Student DOES NOT pay interest

while in school or during 6-month grace periodThen Look At UNSUBSIDIZED Loans = 3.86%The loans that DO accrue interest while you’re in schoolConsider Parent PLUS Loans

6.41% &

Private Loans

However, know the disadvantages of these loans Slide11

Checklist for Minimizing Debt

Federal Loans

Private Loans

Low, fixed interest rates

6-month grace period during which no payments are dueIncome-based repayment optionsWays to lower or postpone payments

Loan forgiveness programs (teachers, public service workers)

Deferment options, especially if you return to school

Historically, higher interest rates

Repayment period differs

Not as much choice of repayment options

Usually not way to lower or postpone payments

No forgiveness programs

Usually no deferment optionsSlide12

FAFSA FAQs

How Child Assets are Assessed

Assets

listed under the student’s name are weighed at 20% of their value when calculating the expected family contribution (

EFC)Parent’s Assets - weighed at 2.6%- 5.6% of their value (based on a sliding income scale and after certain allowances)Slide13

FAFSA FAQs

Taking Retirement Funds

Distributions

Retirement

funds are sheltered from the need analysis processIf you withdraw funds before the financial aid application is filed, you will have converted those funds into an included assetSlide14

Common FAFSA Mistakes

Incorrectly filing income taxes as head of household

If there is an error in the head of household filing status, you’ll need an amended tax return

Listing parent marital status incorrectly

If the custodial parent has remarried, you'll need the stepparent's information as wellFailing to count the student as a member of the householdIncluding retirement assets on the FAFSA

Inflating parents’ education

If parents didn't graduate from college, select "high school" as the highest education attainmentSlide15

Best Student Loan Tips:Student Loan Cancellation Programs

Public

Service Loan Forgiveness Program

The borrower must be employed full-time in a public service

job for 10 yearsCancellation of the remaining balance due on eligible federal student loans after the borrower has made 120 monthly payments under the Income-Based Repayment PlanSlide16

Best Student Loan Tips:Student Loan Cancellation Programs

Public

Service Loan Forgiveness

Program

Emergency management GovernmentMilitary service P

ublic safety &

law enforcement (police and fire)

Public health P

ublic education

E

arly childhood education S

ocial

work in a

family

service

agency

P

ublic

services for individuals with disabilities or the

elderly

P

ublic

interest legal services

P

ublic librarians

S

chool librariansSlide17

Student Loan Fees

Deducted proportionately

from each loan disbursement you

receive

You're responsible for repaying the entire amount you borrowed and not just the amount you receivedHere are the current loan fees for federal student loans:1.051% for Direct Subsidized Loans and Direct Unsubsidized Loans4.204% for Direct PLUS Loans for parents and graduate and professional students

There are no loan fees for Perkins LoansSlide18

#2 UNL Freshman FAQs

So, if I don’t want to be in debt forever, how much financial aid should I take out?Slide19

Expert Guidelines for Debt Load

No

more than

10

%-15% of the expected monthly income from your first job going for repayment of all loansOver 15% means you probably won’t be able to afford car payments20% is the start of the "danger zone" when loan debt is out of controlSlide20

Guidelines

Using Your Monthly Gross Salary When You Graduate

We Recommend - Debt Payments = 10%

Accounting

Salary = $39,062

Max to Borrow = $28,314

Nutritionist

Salary = $29,347

Max to Borrow

= $21,217

Elementary TeacherSalary = $33,765

Max to Borrow

= $24,476Slide21

Financial

Picture of Typical UNL Graduate

Average Amount of Student

Loan Debt

$ 21,000Interest

3.86%

Plan

Length

Monthly

Interest

Standard

10 years

$211

$4,346

Extended

25 years

Only available for over $30,000

Graduated

10 years

$118

$5,419

Income-Contingent

Payments are calculated each year and are based on adjusted gross income, family size, and the total amount of loans – Your payments change as your income changes

Income-Based

Maximum monthly payments will be 15 percent of discretionary income, the difference between adjusted gross income and 150 percent of the poverty guideline for family size and state

Pay as You Earn

Maximum monthly payments will be 10 percent of discretionary income, the difference between adjusted gross income and 150 percent of the poverty guideline for family size and stateSlide22

Tips for Reducing Amount Borrowed

Avoid Student Bill Late Fees

Due the 12

th

of every monthBill emailed on 25th of every monthUse electronic check optionCredit costs you!NOTE: Your student DOES have to give

you permission to access their MyRed

Account.

Use Campus ServicesUNL

student fees pay for

them

Examples: Lied Center discounts, UPC ProgrammingSlide23

Tips for Reducing Amount Borrowed

Never Stop Applying

for

Scholarships

UNL General Scholarship FormOn MyRED - Due FebruaryIndividual Colleges - CBA, Arts & SciencesPrivate – Fastweb.comGet a Part-Time Job with Education BenefitsSome employers,

Americorps, ROTC

Lower Interest Payments

If you have the money, make interest payments on unsubsidized loans while you’re still in schoolSlide24

Mistakes Students Make

VERY COMMON:

Not Knowing How Much They’ve Borrowed

Ex. One student had $60,000, thought had $25,000

TRACK AT: unl.edu/smmcKnow Some Scholarships are TaxableTax Free = Tuition & feesTaxable = Room & board, travel, researchReduce

ExpensesCreating

a spending plan is a great way to discover ways to free up money that can be put towards education expensesSlide25

Mistakes Students Make

If student receives more in student loans, grants, and scholarships than they have to pay in to UNL

Extra is deposited in the bank account you set up in

MyRed

They should know it’s important to:SAVE IT! - In a savings account- Only transfer over when they need itSlide26

#3 UNL Freshman FAQs

Do I need to have my taxes done?Slide27

Tips for Students & Taxes

Discuss if You are Claiming the Student

Person

is under 19 years old or is under 24 and a full-time student AND the taxpayer provided over half of their

support – You get deductions & creditsIf They Are a Dependent, Still FileIf you earned more than $5,950, you must file a tax return

If you had income tax withheld from your pay,

fileKnow the Current Education Credits

Ex. The American Opportunity Credit is a tax credit of up to $2,500 of the cost of tuition, fees and course materials paid during the taxable yearSlide28

Tips for Students & Taxes

Find on

MyRed

Form 1098-T - Tuition

Payments StatementIncludes Proof of Scholarships & Grants and Amounts BilledKnow Textbook AmountsTextbook purchases can be applied to taxes for educational tax

creditsNote: Students can get free tax help every year through UNL VITASlide29

#4 UNL Freshman FAQs

But how do I know how much money I’ll need each year?Slide30

From Survey of Students: Per Academic Year

Item

Amount

Parking permit

$ 400

Textbooks

1,000

Sport

tickets

300

Laundry

320

Cellphone

630

School supplies (printer ink)

250

Gas

300

Student organization/

Greek fees

300

TOTAL

$ 3,500

Eating Out

$400 - $3,000+

Entertainment

$300 - $2,000+

Clothing/Personal Items

$300 - $1,000+Slide31

Figuring Out How Much to Work

Example Real-Life Budget: Living in a 2 Bedroom with a Roommate

Total Cost Per

Month = $

965

Most students would need to work around

25 hours

per week to cover this

cost – with taxes taken out.

Rent = $

325 Electricity

= $

50

Cable = $20 Internet = $20

Groceries = $165 Eating Out = $60

Clothing = $40 Laundry = $10

Toiletries = $40 Gas = $65

Entertainment = $50 Medical needs = $15

Renter’s insurance = $15

Car insurance = $45

Cell phone = $45Slide32

Personalized Spending Plans

Day

Item

Amount

Monday

GasGroceries

(Choice: took the bus to East Campus)

$34$ 21Tuesday

Coffee

(Choice:

skipped a concert with friends)

$ 4.50

Wednesday

Pop and candy bar

(Choice: took the

bus to East Campus)

$ 2.50

Thursday

Movie

(Choice: Didn’t get popcorn and pop)

$

9

Friday

Dinner for friend’s birthday

(Choice: Didn’t order dessert)

$ 12

Saturday

Fast food lunch

Party

$ 6

$ 15

Sunday

Shopping – New

Shirt

(Choice: Decided to pass on the $50 trendy shirt)

$ 30

TOTAL

$ 134

UNL Student: Leah Lives: On-Campus

Weekly budget after major expenses: $ 140Slide33

Personalized Spending Plans

Day

Item

Amount

Monday

Breakfast at gas station$ 4.50

Tuesday

Parking ticketAte out for lunch

Bought present for Mom

$ 30.00

$ 8.42

$

23.00

Wednesday

Gas

Ate

out for lunch

Rented movies at Blockbuster

Groceries

$ 28.23

$ 6.32

$ 8.96

$ 35.69

Thursday

Coffee

Yoga class

$ 5.50

$

14.00

Friday

Takeout

for dinner

Trip to Target for toiletries – Got clothing & candles also

$ 12.62

$

62.00

Saturday

Movie & snack

$ 15.69

Sunday

Brunch with my parents

Laundry

$ 0.00

$ 5.00

TOTAL

$ 259.93

UNL Student: Sarah Lives: On-Campus

Budget after major expenses: No ideaSlide34

Personalized Spending Plans

By having a plan and making good choices, this week Leah spent:

$ 125.93

less than Sarah.

That adds up to:$ 6,044.64 per yearSlide35

Personalized Spending Plans

Mint.com

Get organized

Track expenses – Reduce expenses

Track income – Figure out reduce/increase incomeGet help saving for financial goalsSlide36

Good Habit: Creating Financial Goals

Why develop financial goals?

Don’t Miss Out on Opportunities

, such as studying abroad

Help Them Achieve Larger Life GoalsBuying a house, Buying a car, Going to graduate schoolControl SpendingWithout goals, daily spending on unimportant things can keep students from achieving the really important things in lifeSlide37

Impulse Spending Tricks

Think about your financial goals –

Instead of spending, put money into savings

Take $20 out each week and only spend that

Plan for little purchases

Get 2 lattes a week instead of 5 and save:

$2,080 per year

Get 1 well-made new shirt once a month instead of 3 cheap shirts and save:$1,300 per yearSlide38

Emergency Fund

Dave Ramsey

recommends even college students save for:

Emergency Fund

(3 months living expenses, $500)Financial GoalsBy Paying Yourself FirstIncluding savings in your budgetAutomatically having funds deposited in your savingsBuilding good habits

Dave Ramsey’s “Foundations in Personal Finance” Program

for College Students Available for FREE at UNL SMMCSlide39

#5 UNL Freshman FAQs

What are some other things that see UNL students do to waste money? Slide40

Banking/Credit Union Fees

Read the Account C

ontract!

Some things many people don’t realize:

Overdraft fees (Ex. $35 per day for up to 4 items)Transfer feesFees if you transfer from savings to checking too oftenATM fees

Fees for using another bank’s ATM

International transactions (usually around 3%)Slide41

Not Having Adequate Insurance

Renter’s Insurance

Ask your insurance agent if your family’s current homeowners or renters insurance policy also protects

belongings

in the dormMost policies limit a student’s coverage to 10% of the family’s coverageFor example, if your family’s policy has a personal property limit of $300,000, student belongings will be covered up to $30,000, after the deductible

In most cases, buying separate renters insurance is less expensive than increasing the coverage limits on your family’s homeowners insurance

Average = $150 per yearSlide42

Car Expenses

Locksmiths = $200

Towing = $200

Solution = Triple AAA

Primary - $60Family - $14Think AboutCost of Car on Campus Parking $396Oil changes $120Gas $720

Insurance $600Registration $150

TOTAL = $1,986Bus = FREE

Rent Zip Cars = $75 membership fee$7 per hourSlide43

Becoming a Victim to Identity Theft

Basic Tips:

Copy the front & back of all credit and debit cards and keep the copies in a safe location

This enables you to cancel the card ASAP

Keep credit/debit card receipts in a safe place - If any transactions are in question, call the card issuerCall it in ASAPCredit Card - $50Debit Card - $500Slide44

Moving Off Campus Without Research

Real Life Example

Per Month

On Campus

Double room7 day meal plan

$1,059

Off Campus – 1 Bedroom

2 miles from campus – Does Cook

$1,089

Off Campus

– 1 Bedroom

2 miles from campus – Doesn’t Cook

$1,339

Off Campus – 2 Bedroom

2 miles from campus – Does Cook

$754

Off Campus – 2 Bedroom

2 miles from campus – Doesn’t Cook

$1,004

These are estimates. Actual figures will vary from student to student.

Initial costs = $840 (with roommate, no furniture costs)Slide45

Rentping.comSlide46

Affordable, Quality Housing

Goal = $ 350

Will need a roommate

Stay within 5 miles from campusSlide47

#5 UNL Freshman FAQs

Do I need a credit card?Slide48

Should Students Have Credit Cards?

Not Necessarily!If they want to have it in case of emergencies

(However, a cash emergency fund can work)

If they understand the importance of credit scores

If they want to start building a credit scoreEx: If they want a mortgage or car loan when they’re a Junior or SeniorExperts say:Better to have no credit than to come away from college with a ruined credit score!Slide49

Should Students Have Credit Cards?

Do you need a credit card?

If You Want a Credit Score

Predicts

the risk that you will not pay your credit obligations - Loans, credit cards, rent, etc.Note: Many students wait till they are SophomoresTo borrow money from banks or credit unions for

auto loans, business loans

To rent an apartment

without having a cosignerTo get your dream job

Many

employers check credit scores to determine if you’re responsible

740Slide50

Should Students Have Credit Cards?

Most Important: Understand their credit management habits will

affect their

credit score & their financial future

People with low credit scores will pay more for:Health/Dental/Vision Insurance Car loansCar insuranceMortgagesRentLow

credit scores can prevent you from:Getting an apartmentIn some cases, getting a jobSlide51

Should Students Have Credit Cards?

Credit Checks for SMMC Representative:

Bank Teller

Leasing Consultant for Apartment Company

Marketing Assistant for Retail Management CompanyUniversity PositionSlide52

Characteristics of Good Credit Users

Have the self discipline to live within their means

Are not impulse buyers

Pay their bills in full each month to avoid wasting money on interest

Pay their bills on time – #1 thing to do to build a credit scoreOnly use 30% or less of credit availableDon’t open too many accounts too quick – Only have 1 or 2 and work on building a good account historySlide53

How You Can Help

Help Them Understand the Characteristics

of a Good Credit Card

Look for low APR

If there are low “teaser” interest rates, know what the rate will jump to after the periodKnow the grace periodRead contact and know about feesSlide54

How You Can Help

An optional tool to start teaching

students consequences, accountability, and responsibility is an Ncard Campus Account

Charges

made to your NCard appear on the Student Accounts Consolidated Bill$300 monthly limit (does not include textbooks)Used at retailers around campus Can link to Wells Fargo accountTurns into a debit card

DOES NOT BUILD CREDIT SCORESSlide55

Common Ncard Questions

Pay bill on

MyRed

Can be used in dining halls, but if they are on a meal plan, it does not charge by meal

Fast food restaurants ARE NOT part of the meal plansUsed for identification and to get into buildings, including the RecIf lost, student must notify the NCard office immediatelyReplacement card = $20Slide56

#6 UNL Freshman FAQs

What do I need to discuss with my parents?Slide57

Good Discussion Topics

Mention:

If you want your student to work & how much

(Experts recommend 10-20 hours per week)

How UNL bills will be paidSend student a check, put in student’s account, pay directlyDetails of health, renters, and auto insuranceSaving student loan refund checkWise credit use – Only buy what you can affordIdentity theft – Call in lost cards ASAPBe careful with overusing NCardSlide58

Talking to Your Children About Money

Keep Advice to a Minimum

Rely on the example you’ve set for the past 18 years

B

ut let your student know they can come to you with a problem