Managing Your Personal Finances 101

Facilitators: Ben Flores and Daniel Pringle

Agenda

• Comparing Student Loan Options– Stafford Loans

• Subsidized• Unsubsidized

– PLUS Loans• Parent PLUS Loan• Graduate and

– Federal Perkins Loan– Grants

• Interest Rates– Fixed– Variable

• Avoiding Debt– Techniques to Avoid Debt

Stafford Loans

Subsidized• Lower interest

rate• Interest does not

accrue during school

• 6 month grace to start repay after graduation

• Covers up to $8,500 per year or $65,000 total

Unsubsidized• Higher interest

rate• Interest accrues

during school• 6 month grace

to start repay after graduation

• Covers up to $18,500 per year or $138,500 total

*For additional information visit www.StaffordLoan.com

PLUS Loans

Federal Parent PLUS Loan• For Parents of

undergraduates• 1st payment due 60

days after final disbursement

• The maximum allowed is the amount of attendance minus any other financial assistance received

Direct PLUS Loans• For Graduates and

Professional Degree Students• 1st payment due 60 days after

final disbursement• The maximum allowed is the

amount of attendance minus any other financial assistance received

*For additional information visit www.studentaid.ed.gov

Federal Perkins Loan

• Low interest Federal student loan• School is the lender, however the loan is made

with government funds• Repayment does not begin until 9 months after

graduation• Maximum loan amount is $6000 per year, or

$40,000 total• 10 years to have loan paid in

full

Grants

• Funds that do not have to be paid back• Student need only to apply and be approved• Typically provided to students based upon a

financial need

Types of Grants:Institutional GrantsFederal GrantsOther Grants

Interest Rates

• Fixed interest rates• Variable interest rates• Prime rate

Avoiding Debt

• Create a budget plan• Pay cash for normal expenses• Stop buying unnecessary items you do

not need• Live within your means• Create an “EMERGENCY” fund• Stop getting credit cards

Managing Debt

• Self-help– Develop a budget– Contacting your creditors– Credit counseling

• Debt consolidation• Bankruptcy

Summary

• Student loans are a great way to help pay for your higher education, as with all loans however you should always borrow carefully.

• Grants are also a great resource to help pay for schooling, unlike student loans grants do not have to be paid back.

• Interest rates can vary based upon an individual’s credit score. Interest rates can be high or low, and can be either fixed or

variable.• Debt can be easily overwhelming to an individual if

managed poorly. Be cautious of the debt you have and apply appropriate techniques to reduce any debt you may have.

Resources

• www.StaffordLoan.com• www.studentaid.ed.gov• www.interest.com• http://

www.ftc.gov/bcp/edu/pubs/consumer/credit/cre03.shtm

Questions