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

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

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

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 Non-essentials Student Financial Assistance 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! As a college student your essentials are often time built into your bill, tuition, meal plan, housing. 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 When making adjustments to you budget start with non-essentials You can reduce non-essential expenses or eliminate them altogether! Student Financial Assistance www.usi.edu/financial-aid 812-464-1767

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 Clothing 2-7% Savings Debt Payments Misc Personal Charitable Giving 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. Your parents percentages- but a good food for thought to categorize spending to determine excess *Recommendations from popular debt expert Dave Ramsey Student Financial Assistance 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 Resident Non-Resident Tuition/Fees $8,139 $19,227 Housing $4,806 Food $4,296 Estimated Total Direct Costs $16,608 $27,264 Books/Supplies $1,140 Misc./Personal $1,740 Transportation $750 Total Budget/COA $20,871 $31,959 2018-2019 Undergraduate Student Enrolled in 30 credit hours Living In Own Home/Apartment Resident Non-Resident Tuition/Fees $8,139 $19,227 Estimated Total Direct Costs Housing $6,174 Food $4,296 Books/Supplies $1,140 Misc./Personal $1,740 Transportation $1,354 Total Budget/COA $22,843 $33,931 Student Financial Assistance www.usi.edu/financial-aid 812-464-1767

Student Budget Category Allocation Tuition/Fees 40-60% Housing 20-25% Food 15-20% Books 5-7% Misc/Personal Transportation 3-5% Savings 0-5% Little to no room for choice in Direct Costs Flexibility with Indirect Costs Percentages based on COA 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. Expand on free opportunities in college, and atm usage Student Financial Assistance www.usi.edu/financial-aid 812-464-1767

Student Financial Assistance www.usi.edu/financial-aid 812-464-1767 Remember Budget is a living document adjustments always made day to day expenses impact week to week, month to month, etc. 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

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. Often times credit card usage is viewed as a temporary expense with the plan to pay off but builds into something much less manageable 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

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

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

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 awards). 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

Annual Maximum Subsidized Additional Unsubsidized 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 $6,500 Junior 60 – 89 $7,500 Senior 90+ Graduate $0 $20,500 Year classification will be based on your colleges definition but in general will align with above hours Undergraduate amounts above assumed Dependent Student Student Financial Assistance www.usi.edu/financial-aid 812-464-1767

Student Financial Assistance www.usi.edu/financial-aid 812-464-1767 Interest Rates LOAN TYPE GRADE LEVEL INTEREST RATE (1st disb 7/1/17-6/30/18) Subsidized Loans Undergraduate 4.45 Graduate N/A Unsubsidized Loans 6.00 PLUS Loans Parent and Grad Student 7.00 Private / Alternative Loans Must contact lender for interest rates ? Student Financial Assistance www.usi.edu/financial-aid 812-464-1767

Student Financial Assistance www.usi.edu/financial-aid 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. StudentAid.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 Number of Payments Monthly Payment Amount Total Amount Paid Total Interest Repaid $5, 000 120 $51.70 $1,203.62 $6,203.62 $10,000 $103.40 $2,407.71 $12,407.71 $15,000 $155.10 $3,611.56 $18,611.56 $20,000 $206.80 $4,815.41 $24,815.41 $25,000 $258.49 $6,019.27 $31,019.27 $27,000 $279.28 $6,513.69 $33,513.69 $30,000 $310.19 $7,223.12 $37,223.12 $35,000 $361.89 $8,426.97 $33,426.97 $40,000 $413.59 $9,630.83 $4,9630.83 Student Financial Assistance 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 $2,067.57 Student Financial Assistance 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 Minus Living Expenses $365.51 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 New Balance $976.41 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 $176M 4th 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

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

Student Financial Assistance www.usi.edu/financial-aid 812-464-1767 Managing Debt Requires careful planning Manageable debt depends upon: Your level of income Living expenses To successfully manage your debt a budget is essential Student Financial Assistance www.usi.edu/financial-aid 812-464-1767

Student Financial Assistance 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 National unemployment rate 5.7% Unemployment for college graduates 2.8% Student Financial Assistance www.usi.edu/financial-aid 812-464-1767

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