Eaglenomics Finances and the College Student Financial Assistance

Eaglenomics ® Finances and the College Student Financial Assistance www. usi. edu/financial-aid 812 -464 -1767

What You Need To Know…. Budgeting Credit Cards & College Students Student Loans Managing Student Financial Assistance www. usi. edu/financial-aid 812 -464 -1767

Budgeting Student Financial Assistance www. usi. edu/financial-aid 812 -464 -1767

How To Prepare A Budget A budget involves two key components: • List of income and expenses • Where your money comes from and where it goes • A plan for meeting responsibilities and goals • It helps you determine where you are financially, and will help you figure out which road to take to gain financial stability. Student Financial Assistance www. usi. edu/financial-aid 812 -464 -1767

Expenses There are two types of expenses: Essentials Student Financial Assistance Non-essentials www. usi. edu/financial-aid 812 -464 -1767

Essential Expenses Essential expenses are necessities: • Housing • Utilities • Transportation • Groceries You can reduce essential expenses by changing spending habits! Student Financial Assistance www. usi. edu/financial-aid 812 -464 -1767

Non-essential Expenses Non-essential expenses are expenses that make life more “comfortable, ” such as: • Cable T. V. • The latest cell phone • Credit card bills You can reduce non-essential expenses or eliminate them altogether! Student Financial Assistance www. usi. edu/financial-aid 812 -464 -1767

Budget Components* Category Allocation Housing 25 -35% Utilities 5 -10% Food 5 -15% Transportation 10 -15% Medical 5 -10% Clothing 2 -7% Savings 5 -10% • Percentages in your budget will be based on your personal needs or goals. • Categorizing your spending allows you to recognize where changes can or need to be made. Debt Payments 5 -10% Misc Personal 5 -10% Charitable Giving 10 -15% Student Financial Assistance *Recommendations from popular debt expert Dave Ramsey www. usi. edu/financial-aid 812 -464 -1767

USI Cost of Attendance Budget 2018 -2019 Undergraduate Student Enrolled in 30 credit hours Living on Campus Tuition/Fees Housing Food Estimated Total Direct Costs Books/Supplies Misc. /Personal Transportation Total Budget/COA 2018 -2019 Undergraduate Student Enrolled in 30 credit hours Living In Own Home/Apartment Resident Non-Resident $8, 139 $4, 806 $4, 296 $19, 227 $4, 806 $4, 296 $16, 608 $27, 264 $1, 140 $1, 740 $750 Estimated Total Direct Costs Housing Food Books/Supplies Misc. /Personal Transportation $20, 871 $31, 959 Total Budget/COA Student Financial Assistance Tuition/Fees www. usi. edu/financial-aid Resident Non-Resident $8, 139 $19, 227 $6, 174 $4, 296 $1, 140 $1, 740 $1, 354 $22, 843 $33, 931 812 -464 -1767

Student Budget Category Allocation Tuition/Fees 40 -60% Housing 20 -25% • Little to no room for choice in Direct Costs Food 15 -20% Books 5 -7% • Flexibility with Indirect Costs Misc/Personal 5 -7% Transportation 3 -5% Savings 0 -5% Student Financial Assistance www. usi. edu/financial-aid 812 -464 -1767

Tips For Managing Your Money • Create a budget and stick to it! • Save and project for future expenses. • Do “FREE” things. • Keep records of expenses. • Don’t overuse ATM cards. • Cut out coupons. • Pay credit cards off monthly. Student Financial Assistance www. usi. edu/financial-aid 812 -464 -1767

Remember It is easier to make wise spending decisions when you know where your money comes from, how much you have to spend, and where you spend it. Student Financial Assistance www. usi. edu/financial-aid 812 -464 -1767

Credit Cards & College Students Student Financial Assistance www. usi. edu/financial-aid 812 -464 -1767

Credit Cards & College Students A credit card is a loan! Purchases are made on the promise that you will pay in cash for them later, with INTEREST! A recent study published by Sallie Mae reported that the average undergraduate carried $3, 173 in credit card debt and that the average student graduates owing $4, 130. Student Financial Assistance www. usi. edu/financial-aid 812 -464 -1767

Avoid Credit Card Pitfalls • Keep only one major credit card. • Don't charge anything you cannot pay for right away except for real emergencies. • Always be sure to pay more than the minimum requirement. • Always ask yourself, “Would I ask for a loan for this? " • Do not use a cash advance from a credit card unless you have a serious emergency. Student Financial Assistance www. usi. edu/financial-aid 812 -464 -1767

Credit Scores • 35% Payment History • Delinquencies on record for 7 years • 30% Amounts Owed • 15% Length of Credit History • 10% New Credit and Recently Opened Accounts • 10% Types of Credit in Use • Revolving vs. Installment Student Financial Assistance www. usi. edu/financial-aid 812 -464 -1767

Student Loans Student Financial Assistance www. usi. edu/financial-aid 812 -464 -1767

Student Loans • www. FAFSA. gov to determine gift aid eligibility • Only borrow what you absolutely need. • Remember this is a loan and it does have to be repaid! Student Financial Assistance www. usi. edu/financial-aid 812 -464 -1767

Smart Borrowing Tips • Figure your total college expenses. • Subtract any “free money” (grant, scholarships or merit award • Subtract all possible sources of cash. • Make budget cuts where possible. • Borrow Federal student loans FIRST! Student Financial Assistance www. usi. edu/financial-aid 812 -464 -1767

Direct Loans: What You Should Know Classification Hours Earned Annual Maximum Subsidized Additional Unsubsidized Annual Maximum Freshman 0 -29 $3, 500 $2, 000 $5, 500 Sophomore 30 – 59 $4, 500 $2, 000 $6, 500 Junior 60 – 89 $5, 500 $2, 000 $7, 500 Senior 90+ $5, 500 $2, 000 $7, 500 $0 $20, 500 Graduate Undergraduate amounts above assumed Dependent Student Financial Assistance www. usi. edu/financial-aid 812 -464 -1767

Interest Rates LOAN TYPE Subsidized Loans Unsubsidized Loans PLUS Loans Private / Alternative Loans Student Financial Assistance GRADE LEVEL INTEREST RATE Undergraduate Graduate Parent and Grad Student 4. 45 N/A 4. 45 6. 00 Must contact lender for interest rates www. usi. edu/financial-aid (1 st disb 7/1/17 -6/30/18) 7. 00 ? 812 -464 -1767

Repayment • • Six month “grace period” After you leave school Drop below half-time $29, 400 average loan debt at graduation The student loan repayment options available are designed to be flexible and adaptable to individual needs. For more details regarding repayment plans, visit the government web site: www. Student. Aid. ed. gov Student Financial Assistance www. usi. edu/financial-aid 812 -464 -1767

Sample Repayment Plan (assuming Standard Payment Plan at 4. 45% interest) Total Principal Loan Amount $5, 000 $10, 000 Number of Payments 120 Monthly Payment Amount $51. 70 $103. 40 $15, 000 120 $155. 10 $3, 611. 56 $18, 611. 56 $20, 000 $25, 000 120 $206. 80 $258. 49 $4, 815. 41 $6, 019. 27 $24, 815. 41 $31, 019. 27 $27, 000 120 $279. 28 $6, 513. 69 $33, 513. 69 $30, 000 120 $310. 19 $7, 223. 12 $35, 000 120 $361. 89 $8, 426. 97 $33, 426. 97 $40, 000 120 $413. 59 $9, 630. 83 $4, 9630. 83 Student Financial Assistance Total Amount Paid $1, 203. 62 $2, 407. 71 Total Interest Repaid $6, 203. 62 $12, 407. 71 www. usi. edu/financial-aid 812 -464 -1767

Post-Graduation Repayment Budget Monthly Gross Pay ($35, 000/year salary) $2916. 67 Federal Tax -$369. 90 FICA -$180. 83 Medicare -$42. 29 State -$96. 25 County Tax -$45. 59 Health Insurance -$114. 24 Net Pay Student Financial Assistance $2, 067. 57 www. usi. edu/financial-aid 812 -464 -1767

Post-Graduation Repayment Budget Rent (2 bedroom apartment) -$731. 00 Gas/Electric -$200. 46 Cable/Internet -$89. 97 Smart Phone Plan -$108 2016 Jeep Renegade (4 year $16, 386 loan at 4. 36%) -373 Car Insurance -$88. 17 Gas $2. 14/gallon -$111. 46 $365. 51 Minus Living Expenses Student Financial Assistance www. usi. edu/financial-aid 812 -464 -1767

Post-Graduation Repayment Budget Credit Card Payment ($4, 130 at 17. 99%)* -$164. 19 Student Loan Repayment ($27, 000 at 4. 45% for 10 years) -$279. 28 Minus Debt $-77. 96 Notice this budget does not include groceries ($112. 25). *Initial minimum payment, if continued with no new charges payoff would be 3 years Student Financial Assistance www. usi. edu/financial-aid 812 -464 -1767

Post-Graduation Repayment Budget Adjusted Roommate Split rent/utilities/cable +$510. 72 No new car (optional) +373 Cut credit card usage in college in half ($2, 075, 3 years @ $75. 01) +89. 18 Reduce loan borrowing to $20, 000 10 yr @ $200. 82 +72. 48 $976. 41 New Balance Minor budget adjustments can result in major impact on your ability to meet your financial needs. Student Financial Assistance www. usi. edu/financial-aid 812 -464 -1767

Consequences of Default • Denied employment • Wage garnishment • $176 M 4 th qtr 2015 • Tax refund withheld • Ineligible for further student aid • Derogatory credit • Legal action Student Financial Assistance www. usi. edu/financial-aid 812 -464 -1767

Managing Student Financial Assistance www. usi. edu/financial-aid 812 -464 -1767

Managing Debt • • Student Financial Assistance Requires careful planning Manageable debt depends upon: • Your level of income • Living expenses www. usi. edu/financial-aid 812 -464 -1767

Prioritize Your Debt • • Pay off higher interest rate debt first. Pay off smaller balances first. Make more than one payment a month. Set up a payment schedule, so you are never late on your payments. • Don’t take on new debt until your budget allows it. Failing to plan is planning to fail! Student Financial Assistance www. usi. edu/financial-aid 812 -464 -1767

Light at the End of the Tunnel 2. 5 2. 1 2 1. 5 1. 6 1. 2 1 0. 5 0 High School Graduate Some College Associates Lifetime Earnings Degree Bachelor's Degree (in millions) • • National unemployment rate 5. 7% Unemployment for college graduates 2. 8% Student Financial Assistance www. usi. edu/financial-aid 812 -464 -1767

Helpful Resources • http: //www. finaid. org/ • Loan Repayment calculator includes needed salary based on level of indebtedness • Student budget calculator is a good starting off point in developing your budget • http: //www. mappingyourfuture. org/ • Debt wizard recommends maximum borrowing based on expected salary • http: //nslds. ed. gov • https: //www. Bettermoneyhabits. com Student Financial Assistance www. usi. edu/financial-aid 812 -464 -1767