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<strong>Money</strong> <strong>Management</strong> &<br />
<strong>Responsible</strong> <strong>Borrowing</strong>
Types of Educational Financing<br />
<br />
<br />
<br />
<br />
<br />
<br />
Self Financing<br />
Government Loans<br />
Government Grants<br />
State Funds<br />
Private Loans<br />
Scholarships
How to create a budget<br />
<br />
Income vs. Obligations<br />
Income comes from take home pay from your job, tips, alimony, child<br />
support payments you receive, or unemployment benefits. Any money<br />
that you receive on a regular basis should be included as income in<br />
your budget.<br />
Obligations are the payments you are required to make each month.<br />
This includes rent or mortgage payment, utilities, food, childcare<br />
expenses and so on.<br />
Discretionary <strong>Money</strong> or “Fun <strong>Money</strong>” is the money you have left over<br />
after fulfilling your monthly obligations.
Ways to generate more income<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
Sell unwanted items<br />
Pick up an additional part time job<br />
Get a roommate to help share expenses<br />
Set up a babysitting coop<br />
Don’t eat out<br />
Take your lunch to work<br />
Make home-made gifts
Smart <strong>Borrowing</strong><br />
<br />
<br />
<br />
<br />
Select a credit card with a low interest rate and a generous grace<br />
period.<br />
Try to pay your credit cards off every month (live within your means).<br />
Know your credit score. Get a copy of your credit report and make<br />
sure it is accurate.<br />
Watch your credit score so that you can track for malicious behavior<br />
such as identity theft.<br />
Score<br />
Grade<br />
720 and above Excellent<br />
680-719 Good<br />
620-679 Average<br />
580-619 Poor<br />
500-579 Very Poor<br />
Less than 500 Not Credit Worthy
Paying Your <strong>Student</strong> Loans<br />
<br />
<br />
Consequences for not paying back a student loan are severe and<br />
can ruin your credit for years to come.<br />
If you can not pay your loan:<br />
Deferment allows you to temporality postpone making your federal<br />
student loan payments or to temporarily reduce the amount you pay.<br />
During a deferment, subsidized Stafford Loans do not accrue interest.<br />
Unsubsidized Stafford loans, PLUS loans, and consolidation loans, do<br />
accrue interest during the deferment that will be added to the principal<br />
of your loan and increase the amount you owe.<br />
<br />
Forbearance allows you to temporarily stop making monthly loan<br />
payments. All loans accrue interest during forbearance, so it's smart to<br />
pay at least the monthly interest so the total amount you owe will not<br />
increase.
Payment Plans<br />
<br />
<br />
If you run into a hardship and are having troubles paying your loan,<br />
COMMUNICATE with the creditors. They are willing to work with you if<br />
you show good faith efforts.<br />
Some options include:<br />
<br />
<br />
<br />
<br />
Standard Repayment Plan- spreads out the payments equally over 10 years.<br />
Graduated Repayment- your payments start low and increase every two<br />
years. You will pay more interest with this plan than with the standard plan.<br />
Extended Payment- over $430,000 in federal loans allows you to pay the loan<br />
over 25 years.<br />
Income Sensitive Repayment Plan- payments are adjusted annually, based<br />
on your monthly gross income. You may choose this plan for up to five years,<br />
after which, your account will revert to either the Standard or Graduated<br />
Repayment Plan
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