UNL Student Money Management Center

UNL Student Money Management

Center

Money Smart

IntroductionErin Wirth, Accredited Financial Counselor

Peer Money Coaches

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

Outstanding Planning Education & Financial

Counseling Center

Building a Financial Education Brand & Marketing Communications

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

Personalized Money Management Sessions• One-on-One Money Management

Coaching SessionsWith an Accredited Financial Counselor or Peer Money Coach, a UNL Student

Common Session Topics:* Spending Plans* Financial Goals* Organizing Finances* Establishing Credit* Saving Money* Debt Repayment* Investment Education* Understanding Financial Aid* Selecting Employee Benefits* Major Purchases

IntroductionPurpose: • 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 Freshmen

Stories from UNL ParentsRemember:

• 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!

#1 UNL Freshman FAQs

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

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 ForWill be listed at: https://myred.nebraska.edu

• Understand How Many Grants & Scholarships You Are GettingFinancial aid you DO NOT pay back

• ONLY BORROW WHAT YOU NEED!

UNL CostsCosts Resident Non-ResidentCredit Hour $216 $660.25Business $268 $817.25Engineering $309.50 $860Architecture $292 $844

Fees Per Class $11.35 $11.35Programs & Facilities Fees(per semester)

$557 $557

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 period

• Then Look At UNSUBSIDIZED Loans = 3.86%The loans that DO accrue interest while you’re in school

• Consider Parent PLUS Loans 6.41% & Private LoansHowever, know the disadvantages of these loans

Checklist for Minimizing DebtFederal Loans Private Loans

• Low, fixed interest rates• 6-month grace period during which

no payments are due• Income-based repayment options• Ways 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 options

FAFSA FAQsHow 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)

FAFSA FAQsTaking Retirement Funds Distributions

• Retirement funds are sheltered from the need analysis process

• If you withdraw funds before the financial aid application is filed, you will have converted those funds into an included asset

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 incorrectlyIf the custodial parent has remarried, you'll need the stepparent's information as well

• Failing to count the student as a member of the household

• Including retirement assets on the FAFSA

• Inflating parents’ educationIf parents didn't graduate from college, select "high school" as the highest education attainment

Best Student Loan Tips:Student Loan Cancellation ProgramsPublic Service Loan Forgiveness Program

• The borrower must be employed full-time in a public service job for 10 years

• Cancellation of the remaining balance due on eligible federal student loans after the borrower has made 120 monthly payments under the Income-Based Repayment Plan

Best Student Loan Tips:Student Loan Cancellation ProgramsPublic Service Loan Forgiveness Program• Emergency management • Government• Military service • Public safety & law enforcement (police and fire) • Public health • Public education• Early childhood education • Social work in a family service agency • Public services for individuals with disabilities or

the elderly• Public interest legal services • Public librarians • School librarians

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 received

Here are the current loan fees for federal student loans:

• 1.051% for Direct Subsidized Loans and Direct Unsubsidized Loans

• 4.204% for Direct PLUS Loans for parents and graduate and professional students

• There are no loan fees for Perkins Loans


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

Expert Guidelines for Debt Load• No more than 10%-15% of the expected

monthly income from your first job going for repayment of all loans

• Over 15% means you probably won’t be able to afford car payments

• 20% is the start of the "danger zone" when loan debt is out of control

GuidelinesUsing Your Monthly Gross Salary When You GraduateWe Recommend - Debt Payments = 10%

Accounting

Salary = $39,062

Max to Borrow = $28,314

Nutritionist

Salary = $29,347


Elementary Teacher

Salary = $33,765


Financial Picture of Typical UNL GraduateAverage Amount of Student Loan Debt

$ 21,000

Interest 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 state

Tips for Reducing Amount BorrowedAvoid Student Bill Late Fees

• Due the 12th of every month

• Bill emailed on 25th of every month

• Use electronic check optionCredit costs you!

• NOTE: Your student DOES have to giveyou permission to access their MyRedAccount.

• Use Campus ServicesUNL student fees pay for themExamples: Lied Center discounts, UPC Programming

Tips for Reducing Amount BorrowedNever Stop Applying for Scholarships• UNL General Scholarship Form

On MyRED - Due February• Individual Colleges - CBA, Arts & Sciences• Private – Fastweb.com

Get a Part-Time Job with Education BenefitsSome employers, Americorps, ROTC

Lower Interest PaymentsIf you have the money, make interest payments on unsubsidized loans while you’re still in school

Mistakes Students MakeVERY COMMON: Not Knowing How Much They’ve BorrowedEx. One student had $60,000, thought had $25,000TRACK AT: unl.edu/smmc

Know Some Scholarships are Taxable

• Tax Free = Tuition & fees

• Taxable = Room & board, travel, research

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

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 it


Do I need to have my taxes done?

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 & credits

• If They Are a Dependent, Still FileIf you earned more than $5,950, you must file a tax returnIf you had income tax withheld from your pay, file

• Know the Current Education CreditsEx. 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 year

Tips for Students & Taxes• Find on MyRed

Form 1098-T - Tuition Payments StatementIncludes Proof of Scholarships & Grants and Amounts Billed

• Know Textbook AmountsTextbook purchases can be applied to taxes for educational tax credits

• Note: Students can get free tax help every year through UNL VITA


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

From Survey of Students: Per Academic Year

Item AmountParking permit $ 400Textbooks 1,000Sport tickets 300

Laundry 320Cellphone 630School supplies (printer ink)

250

Gas 300Student organization/Greek fees

300

TOTAL $ 3,500

Eating Out

$400 - $3,000+

Entertainment

$300 - $2,000+

Clothing/Personal Items

$300 - $1,000+

Figuring Out How Much to WorkExample 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 = $45

Personalized Spending Plans

Day Item Amount

Monday GasGroceries(Choice: took the bus to East Campus)

$34$ 21

Tuesday 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 lunchParty

$ 6$ 15

Sunday Shopping – New Shirt(Choice: Decided to pass on the $50 trendy shirt)

$ 30

TOTAL $ 134

UNL Student: Leah Lives: On-CampusWeekly budget after major expenses: $ 140


Day Item Amount

Monday Breakfast at gas station $ 4.50

Tuesday Parking ticketAte out for lunchBought present for Mom

$ 30.00$ 8.42

$ 23.00Wednesday Gas

Ate out for lunchRented movies at BlockbusterGroceries

$ 28.23$ 6.32$ 8.96

$ 35.69Thursday Coffee

Yoga class$ 5.50

$ 14.00

Friday Takeout for dinnerTrip to Target for toiletries – Got clothing & candles also

$ 12.62$ 62.00

Saturday Movie & snack $ 15.69

Sunday Brunch with my parentsLaundry

$ 0.00$ 5.00

TOTAL $ 259.93

UNL Student: Sarah Lives: On-CampusBudget after major expenses: No idea

Personalized Spending PlansBy having a plan and making good

choices, this week Leah spent:

$ 125.93less than Sarah.

That adds up to:

$ 6,044.64 per year


Mint.com• Get organized• Track expenses – Reduce expenses• Track income – Figure out reduce/increase income• Get help saving for financial goals

Good Habit: Creating Financial GoalsWhy 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 school

• Control SpendingWithout goals, daily spending on unimportant things can keep students from achieving the really important things in life

Impulse Spending TricksThink 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 year

Emergency FundDave Ramsey recommends even college students save for:• Emergency Fund

(3 months living expenses, $500)• Financial Goals

By Paying Yourself First• Including savings in your budget• Automatically having funds deposited

in your savings• Building good habits

Dave Ramsey’s “Foundations in Personal Finance” Program for College Students Available for FREE at UNL SMMC


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

Banking/Credit Union Fees• Read the Account Contract!

• 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 often

- ATM feesFees for using another bank’s ATM

- International transactions (usually around 3%)

Not Having Adequate InsuranceRenter’s Insurance• Ask your insurance agent if your family’s current

homeowners or renters insurance policy also protects belongings in the dorm

• Most policies limit a student’s coverage to 10% of the family’s coverage

• For 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 insuranceAverage = $150 per year

Car Expenses

Locksmiths = $200Towing = $200

Solution = Triple AAA

Primary - $60Family - $14

Think AboutCost of Car on Campus Parking $396Oil changes $120Gas $720Insurance $600Registration $150TOTAL = $1,986

Bus = FREE

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

Becoming a Victim to Identity TheftBasic Tips:• Copy the front & back of all credit and

debit cards and keep the copies in a safe locationThis 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 issuer

• Call it in ASAPCredit Card - $50Debit Card - $500

Moving Off Campus Without ResearchReal Life Example Per Month

On CampusDouble room7 day meal plan

$1,059

Off Campus – 1 Bedroom2 miles from campus – Does Cook

$1,089

Off Campus – 1 Bedroom2 miles from campus – Doesn’t Cook

$1,339

Off Campus – 2 Bedroom2 miles from campus – Does Cook

$754

Off Campus – 2 Bedroom2 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)

Rentping.com

Affordable, Quality HousingGoal = $ 350

• Will need a roommate• Stay within 5 miles from

campus


Do I need a credit card?

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 Senior

Experts say:

Better to have no credit than to come away from college with a ruined credit score!

Should Students Have Credit Cards?Do you need a credit card?

If You Want a Credit ScorePredicts the risk that you will not pay your credit obligations - Loans, credit cards, rent, etc.

Note: Many students wait till they are Sophomores

To borrow money from banks or credit unions for auto loans, business loans

To rent an apartment without having a cosigner

To get your dream job Many employers check credit scores to determine if you’re responsible

740

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 loans• Car insurance• Mortgages• Rent

Low credit scores can prevent you from:• Getting an apartment• In some cases, getting a job

Should Students Have Credit Cards?Credit Checks for SMMC Representative:

• Bank Teller• Leasing Consultant for Apartment

Company• Marketing Assistant for Retail

Management Company• University Position

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 score

• Only use 30% or less of credit available

• Don’t open too many accounts too quick – Only have 1 or 2 and work on building a good account history

How You Can HelpHelp 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 period

• Know the grace period

• Read contact and know about fees

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 SCORES

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 plans

• Used for identification and to get into buildings, including the Rec

• If lost, student must notify the NCard office immediately

• Replacement card = $20


What do I need to discuss with my parents?

Good Discussion TopicsMention:• If you want your student to work & how much

(Experts recommend 10-20 hours per week)• How UNL bills will be paid

Send student a check, put in student’s account, pay directly• Details of health, renters, and auto insurance• Saving student loan refund check• Wise credit use – Only buy what you can afford• Identity theft – Call in lost cards ASAP• Be careful with overusing NCard

Talking to Your Children About Money

Keep Advice to a Minimum

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

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

UNL Student Money Management Center

Documents

Transcript of UNL Student Money Management Center