Student LoAN BUDGETING BERNADINE LISCHYNskI

HYPOTHESIS Upon completion of my degree in Medical Reimbursement and Coding I will have accumulated student loans totaling $39,040.00. The interest that will accrue will be at a rate of 4.0%. My monthly payments will be $395.26 per month for 120 months with interest paid in the amount of $8,391.32 over the term of the loan. Therefore my total student loan debt for my degree will be $47,431.20 if paid in full in the year 2027. Loan calculated on: www.calcxml.com

Student loans-rates & responsibilities What sources are available for investigating and calculating student loans? A credible and reliable source is one that is sponsored by the US Government. The Department of Education has current information regarding loan types, rates and responsibilities.

Total loan balance completing mCCA- AAS Degree 60 Credits-2 year program Registration, Technology Fees $ 1600.00 Bookstore Charges $ 2400.00 Base Credit Charges $584/credit $35040.00 Approximate 2-Year Costs $39040.00 Note: Per the Bryant & Stratton College Website “costs reflect approximate charges for technology fees, registration and graduation based on current costs at February, 2017 (Bryant & Stratton, 2017, p.24). Additionally this cost does not reflect any awards or scholarships that may reduce the total cost.

10 -year STANDARD PAYMENT PLAN FUTURE VALUE OF LOANS LOAN AMMORTIZATION SCHEDULE   LOAN VALUES Loan amount $39,040.00 Annual interest rate 4.00% Loan period in years 10 Number of payments per year 12 Start date of loan 2/13/17 LOAN SUMMARY   LOAN VALUES Scheduled Payment $395.26 Scheduled Number of Payments 120 Total Interest Accrued $8,391.32 Total Value of Loan $47,431.20 Excel Spreadsheet calculation of 10 year payment plan with 4% fixed interest.

8-year STANDARD PAYMENT PLAN FUTURE VALUE OF LOANS LOAN AMORTIZATION SCHEDULE   ENTER VALUES LOAN SUMMARY Loan amount $39,040.00 Scheduled payment $475.87 Annual interest rate 4.00% Scheduled number of payments 96 Loan period in years 8 Actual number of payments Number of payments per year 12 Total early payments $0.00 Start date of loan 2/24/17 Total interest $6,643.45 Total Value of Loan $45,683.45 8-Year Loan with recalculated monthly payment and accrued interest.

Does it pay to increase your monthly loan payments based on your income? How does the change from 10 years to 8 years modify your monthly payments? Monthly payments would increase from $395.26 to $475.87. How does that change the total interest charged over the life of the student loan? The interest accrued would drop from $8391.32 for 10 years to $6643.46 for 8 years. The final comparison between the two student loans is the overall cost of the loan comparison between 10 years and 8 years: 10 years: $47,421.20 8 years: $45,683.45

Student loan conclusion The average salary in Phoenix, Arizona for a Medical Reimbursement and Coding Specialist is between $48,000 and $55,000 annually. With the monthly payment difference of only $80.61 to reduce the life of the loan by two years, resulting in an overall savings of $1,747.75 in interest charges. CONCLUSION: With a slight adjustment in a monthly budget calculation it seems beneficial to reduce the term of the student loan and increase the monthly payment. By making the effort to prepare an accurate cost analysis for your education expenses you provide yourself with the necessary information to make financial decisions that work for your own personal situation. Personally, I would eliminate some unnecessary spending and work towards paying off my debt sooner rather than give away more money towards interest charges. This is a small sacrifice to make to strengthen my financial situation for my future.

Student Financial Aid-Student Loans Many students require financial aid assistance to assist with the cost of education. According to the website FinAid, “an education loan is a form of financial aid that must be repaid, with interest” (FinAid, 2017, p.1). There are three categories of loans, student loans, parent loans and alternative (private), student loans. Two other categories of loans include the consolidation loan and the newly developed peer-to-peer loans. All of these loans must be paid back and there are serious consequences for allowing the loans to become delinquent.

Types of Scholarships and grants Many students cannot afford to pay for their education on their own so they turn to student loans, scholarships and grants. While student loans are a means to assist they are not free money, whereas scholarships and grants can be with criteria that must be maintained. As described on the Student Aid website, “grants and scholarships are often called “gift aid” because they are free money” (StudentAid, 2017, p.1). The difference between the two are: grants are need-based while scholarships are awarded based on merit. Both of these types of aid awards come from Federal and State governments, non-profit organizations as well as the college or institution you are attending. For the most current information on these types of assistance a quick search on the U.S. Department of Education’s website will give insight into what is available at the time.

References: FinAid: The smart student guide to financial aid. 2017. Retrieved from www.finaid.org/loans Federal Student Aid: Grants and scholarships are free money to help pay for college or career school. 2017. Retrieved from https://studentaid.ed.gov/sa/types/grants-scholarships Bryant & Stratton College: Official catalog 2017. Retrieved from https://www.bryantstratton.edu/pdf/Catalog.pdf Loan Calculations derived from: https://www.calcxml.com/calculators/loan-payment-calculator