Saving for College Tuition and banking Consumer Ed- week 2 Saving for College Tuition and banking

What do all of these numbers have in common? A. $11,091 B. $ 15,626 Bell Ringer 1/11/16 What do all of these numbers have in common? A. $11,091 B. $ 15,626 C. $12,202. **D. $45,278

Objectives/Agenda Discuss the cost of college tuition and start to think about how you will pay for school BR Research your school

Bell Ringer What do you guys think? How many of you want to go to some form of schooling? (college, training, technical college, etc)

College Tuition: What’s the best buy? Research 1 college you want to go to. Keep in mind: In-state tuition: tuition paid if you have LIVED in that state for at least 1 year (UofI) Out of state: If you come from another state (Colorado)

Preview/Worksheet Do preview questions on your worksheet Worksheet: Use collegeboard.org for help Example: University of Colorado (my alma mater)

What do you still need to know? Share out What did you find out? What do you still need to know? Exit Slip: Turn in your worksheet. I am grading # 7 for an exit slip grade 

Bell Ringer 1/12/16 Do the math: You borrow $100 from Mr. Kipp. You are required to pay him back at the end of 30 days IN FULL and with 10% interest. How much will you end up owing him? How about after a year?

Bell Ringer: What did you put down? Objective: discuss loans and how to be smart when borrowing money You need your note book today. We are going to take notes and discuss. If you aren’t discussing and taking notes, you will lose participation points

Loans and interest? What are loans? What is interest?

Interest: what you PAY for what you borrow Vocab: Loans: money borrowed Interest: what you PAY for what you borrow

What questions do you want to ask before you borrow money? Borrowing Money Why do we borrow money? What questions do you want to ask before you borrow money?

How reliable is my lender? What is the interest rate? Questions to ask How reliable is my lender? What is the interest rate? How will I pay this person (or place) back?

Don’t borrow more than you even THINK you can afford Keep in mind Don’t borrow more than you even THINK you can afford READ THE small print (fine details) Ask questions Budget your money—ask yourself- do I really need this? What is the cost/benefit of having this item?

Scenarios: Find the positive/negative/of each A. Jada wants to get her nail and hair done for her birthday and take her friends out to a special dinner. She has to borrow money from her mom. She borrows $500 and mom does not charge her interest. B. Deon wants to buy a new car but he doesn’t have the best credit or money. He goes to a bank and they loan him $20,000 at 15% interest over the course of 5 years. C. Victoria needs a new pair of running shoes but she knows she does not have the money. She spends time researching the best buy and decides she wants to save up instead of asking her parents for money.

Objective/Agenda Learn what student loans are, how you get them, the costs, and repayment options Agenda: BR Notes w/ discussion

Bell Ringer 1/12/16 What do you know about student loans? Do you believe all of what you think you know or hear to be truth or fiction? Which ones are which?

Interest is: What you PAY for what you borrow (daily, weekly, monthly) What are student loans? Student loans: money LOANED to YOU (the student) to pay for your college education A loan is: a thing that is borrowed, especially a sum of money that is expected to be paid back with interest. Interest is: What you PAY for what you borrow (daily, weekly, monthly)

Several types: Two most common: Student Loans: Several types: Two most common: Federal: The GOVERNMENT gives you money (you borrow) Private: You borrow from a bank or a person (maybe a parent? Grandparent?) All need a co-signer (someone to guarantee that it will be paid back!)

FAFSA: Determined by your parent’s income, etc. Most people qualify Federal Loans: FAFSA: Determined by your parent’s income, etc. Most people qualify First year students: Can borrow UP TO $5500 on your own! Interest rates and payment lengths are usually low/flexible

Several different types of loans: Federal Loans Several different types of loans: Subsidized: Interest is paid FOR YOU by the government while you are in school (lower interest) Unsubsidized: Interest is NOT paid by anyone unless you can afford to pay it. This means, it will ACCRUE (build up of higher interest )

You are expected to pay everything back (interest and all) Federal Loans: You are expected to pay everything back (interest and all) Repayment starts AFTER you graduate (6 months or so) You can take out more money each year More money you can take out each year

Usually charge higher interest rates Private Loans Taken out from a bank Usually charge higher interest rates You must start repaying them right away (even while you are in school)

Interest/Taking out money Biggest issue is INTEREST (money that is charged to you for borrowing the money) Another issue is taking out TOO much money.

Scenarios: Which is Best? Why? Molly borrows a government subsidized loan for her first year of undergrad. She takes out $5000 at 3% interest. Karen borrows a government unsubsidized loan for her first year of undergrad. She take out $5000 at 6% interest. Amy borrows a private Discover loan for her first year of undergrad. She also borrows $5000 at 8% interest and is required to make payments while she is in school.