1. Eaglenomics® Finances and the College Student
Student Financial Assistance

2. Student Financial Assistance www.usi.edu/financial-aid 812-464-1767
What You Need To Know….
Budgeting
Credit Cards & College Students
Student Loans
Managing
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3. Student Financial Assistance www.usi.edu/financial-aid 812-464-1767
Budgeting
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4. 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.
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5. Expenses There are two types of expenses: Essentials Non-essentials
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6. 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.
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7. 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!
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8. 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
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9. USI Cost of Attendance Budget
Undergraduate Student
Enrolled in 30 credit hours
Living on Campus
Resident
Non-Resident
Tuition/Fees
$7,405
$17,647
Housing
$4,492
Food
$4,040
Estimated Total Direct Costs
$15,937
$26,179
Books/Supplies
$1,140
Misc./Personal
$1,582
Transportation
$675
Total Budget/COA
$19,334
$29,576
Undergraduate Student
Enrolled in 30 credit hours
Living In Own Home/Apartment
Resident
Non-Resident
Tuition/Fees
$7,405
$17,647
Estimated Total Direct Costs
Housing
$5,880
Food
$4,040
Books/Supplies
$1,140
Misc./Personal
$1,582
Transportation
$1,231
Total Budget/COA
$21,278
$31,520
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10. 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
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11. 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
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12. 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.
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13. Student Financial Assistance www.usi.edu/financial-aid 812-464-1767
Credit Cards & College Students
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14. 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
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15. 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.
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16. 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
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17. Student Financial Assistance www.usi.edu/financial-aid 812-464-1767
Student Loans
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18. Student Financial Assistance www.usi.edu/financial-aid 812-464-1767
Student Loans
to determine gift aid eligibility
Only borrow what you absolutely need.
Remember this is a loan and it does have to be repaid!
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19. 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!
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20. 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
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21. Student Financial Assistance www.usi.edu/financial-aid 812-464-1767
Interest Rates
LOAN TYPE
GRADE LEVEL
INTEREST RATE
(1st disb 7/1/16-6/30/17)
Subsidized Loans
Undergraduate
3.76
Graduate
N/A
Unsubsidized Loans
5.31
PLUS Loans
Parent and Grad Student
6.31
Private / Alternative Loans
Must contact lender for interest rates ?
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22. 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
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23. Sample Repayment Plan
(assuming Standard Payment Plan at 3.76% interest)
Total Principal
Loan Amount
Number of
Payments
Monthly Payment
Amount
Total Amount Paid
Total Interest Repaid
$5, 000
120
$50.05
$6,006.62
$1,006.62
$10,000
$100.11
$12,012.97
$2,012.97
$15,000
$150.16
$18,019.59
$3,019.59
$20,000
$200.22
$24,025.95
$4,025.95
$25,000
$250.27
$30,032.56
$5,032.56
$27,000
$270.29
$32,435.20
$5,435.20
$30,000
$300.33
$36,038.92
$6,038.92
$35,000
$350.38
$42,045.53
$7,045.53
$40,000
$400.43
$48,052.15
$8,052.15
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24. Post-Graduation Repayment Budget
Monthly Gross Pay ($35,000/year salary) $
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
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25. 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
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26. Post-Graduation Repayment Budget
Credit Card Payment ($4,130 at 17.99%)*
-$164.19
Student Loan Repayment ($27,000 at 3.76% for 10 years)
-$270.29
Minus Debt
$-68.97
Notice this budget does not include groceries ($112.25).
*Initial minimum payment, if continued with no new charges payoff would be 3 years
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27. 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 $75.01)
+89.18
Reduce loan borrowing to $20,000
10 $200.82
+69.47
New Balance
$973.40
Minor budget adjustments can result in major impact on your ability to meet your financial needs.
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28. Consequences of Default
Denied employment
Wage garnishment
$176M 4th qtr 2015
Tax refund withheld
Ineligible for further student aid
Derogatory credit
Legal action
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29. Student Financial Assistance www.usi.edu/financial-aid 812-464-1767
Managing
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30. 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
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31. 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!
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32. Light at the End of the Tunnel
National unemployment rate 5.7%
Unemployment for college graduates 2.8%
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33. Student Financial Assistance www.usi.edu/financial-aid 812-464-1767
Helpful Resources
Loan Repayment calculator includes needed salary based on level of indebtedness
Student budget calculator is a good starting off point in developing your budget
Debt wizard recommends maximum borrowing based on expected salary
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