1. Financial Literacy 2014/2015 Office of Student Financial Assistance

2. Agenda 2014/2015 2 Participants will gain an understanding of how to manage:  Student Loan Repayment  A Budget  Credit

3. Why Financial Literacy? Because many students and young adults:  Take financial risks without realizing it  Lack basic financial skills to make good decisions when managing money  Affect others with their financial decisions (i.e. institutional cohort default rates) 2014/2015 3

4. Repayment of Your Student Loan Debt  Provides types of student loans available, rights and responsibilities associated with student loans, repayment options and where to seek guidance. 2014/2015 4

5. What are my rights?  Borrowers have the right to know the:  Amount borrowed  Interest rate  Date repayment begins  Servicer  Fees (if any) associated with loan 2014/2015 5

6. Know how much you owe  National Student Loan Data System (NSLDS)  www.NSLDS.ed.gov www.NSLDS.ed.gov  1-800-4-FED-AID 2014/2015 6

7. 7 Types of Federal Student Loans Subsidized Direct Federal Stafford Loans Loans based on financial need. Unsubsidized Direct Federal Stafford Loans Loans not based on financial need. Federal PLUS Loans: Parent PLUS Grad PLUS Loans borrowed by an undergraduate student’s parents or by a graduate or professional degree- seeking student. In order to qualify, the borrower must not have adverse credit or must obtain a credit-worthy endorser. Federal Consolidation Loans Multiple student loans consolidated or merged into one new loan. Federal Perkins Loans Loans for which you make repayment to the school.

8. Interest: Simple Daily Basis 2014/2015 8 Outstanding Principal Balance Interest Rate/365 # days in billing cycle Interest Example: a $10,000 Direct Loan balance at 6.8% interest would be calculated for the month of July as: $10,000 x (.068/365) x 31 = $57.75

9. Life cycle of a student loan 2014/2015 9

10. What are my responsibilities?  Borrowers have the responsibility to:  Repay the amount borrowed plus interest  Update personal contact information when it changes  Seek help when unable to pay 2014/2015 10

11. Repayment  Borrowers must repay EVEN IF you:  Are dissatisfied with school or services  Are not able to secure employment  Do not complete your program of study 2014/2015 11

12. Repayment Plans 2014/2015 12

13. Staying on Track  Use a Repayment Estimator to compare and select a plan that best fits your budget:  www.StudentAid.ed.gov www.StudentAid.ed.gov  www.MappingYourFuture.org www.MappingYourFuture.org  www.FinAid.org www.FinAid.org  Make monthly payments ON TIME  Sign up for automatic withdrawal if option is offered 2014/2015 13

14. Delinquency 2014/2015 14  If you are ONE day late on your student loan payment, you are considered delinquent. Default  If you have not made payments for 270 days or 9 months, you will be considered in default status.

15. Consequences of Default  Owe entire balance immediately  Ineligible for interest rate reductions  Ineligible for deferments/forbearances  Ineligible for additional financial aid  Lose positive rating on credit report 2014/2015 15

16. Consequences of Default  Potentially assigned to a collection agency which will incur additional costs and fees  State/federal income tax refunds may be withheld (offset)  Part of wages may be withheld (garnished)  Florida Lottery winnings may be withheld (offset) 2014/2015 16

17. Where to find help  Contact the servicer IMMEDIATELY if unable to make a scheduled payment  Options include:  Repayment plan change  Deferment  Forbearance  Consolidation 2014/2015 17

18. Options Available 2014/2015 18

19. Communicating with the Servicer  Program servicer contact information into your cell phone for easy access  Notify of any changes to address, employment, e-mail address, cell number  Keep a folder of all loan records in a safe place  Document each communication with servicer for reference 2014/2015 19

20. Resolving Disputes  Self-Resolution Checklist  www.StudentAid.ed.gov www.StudentAid.ed.gov  Common Issues and How to Resolve  www.StudentAid.ed.gov/repay- loans/disputes www.StudentAid.ed.gov/repay- loans/disputes  Ombudsman Office  1-877-557-2575  www.StudentAid.ed.gov/repay- loans/disputes/prepare www.StudentAid.ed.gov/repay- loans/disputes/prepare 2014/2015 20

21. Cancellation of student loan debt  Death  Disability (total and permanent)  School Closure  Identity Theft  False Loan Certification  Failure of school to pay a refund if student withdraws  Bankruptcy (in rare cases) 2014/2015 21

22. Saving Money  Tax Deductions  American Opportunity Tax Credit  Lifetime Learning Credit  www.IRS.gov/publications/p970 www.IRS.gov/publications/p970  Loan Forgiveness Programs  www.StudentAid.ed.gov www.StudentAid.ed.gov  www.FinAid.org www.FinAid.org 2014/2015 22

23. Budgeting is the foundation of achieving your financial goals while maintaining your day-to-day living expenses. Managing Your Budget 2014/2015 23

24. Steps for Budgeting #1 Set Goals #2 Organize Expenses #3 Set a realistic budget #4 Write it down! #5 Keep records 2014/2015 24

25. Budget Template INCOME MONEY OUT Profit or (Loss) 2014/2015 25

26. Reducing Expenses  Evaluate your cell phone plan and select only services you need.  Cable is not a necessity. Watch TV on your laptop.  Use public transportation.  Eating out is expensive – if you have a meal plan on campus – use it! You’ve paid for it.  Shop at Goodwill or consignment shops. 2014/2015 26

27. Managing Your Credit Establishing and maintaining good credit can provide many benefits to your financial future 2014/2015 27

28. Establishing Credit Set up a realistic budget Open a checking or savings account Evaluate options for credit 2014/2015 28

29. Establishing Good Credit  Pay the minimum balance (or more) ON TIME each month  Avoid going over your credit limit  Protect yourself from fraud – SIGN YOUR CARD or write “Ask for ID”  Sign up for e-statements if available. 2014/2015 29

30. Your Credit Report  Check your credit report annually.  www.AnnualCreditReport.com www.AnnualCreditReport.com  Three major national credit reporting agencies: www.Equifax.comwww.Equifax.com or 1-800-685-1111 www.Experian.comwww.Experian.com or 1-888-397-3742 www.Transunion.comwww.Transunion.com or 1-800-888-4213 2014/2015 30

31. Your Credit Score  Based on information in your credit report  Affects future credit, interest rates, deposits, and possibly employment.  Small fee for obtaining a credit score  For more information on how to dispute credit report errors, please visit www.AnnualCreditReport.com or www.MyFICO.com www.AnnualCreditReport.com www.MyFICO.com 2014/2015 31

32. Credit Scoring Table Credit ScoreDescription 730 -850Excellent 700 – 729Great 670 – 699Good 585 – 699Average 350 – 584Bad The credit rating scale minimum and maximum ranges from 350- 850. While the highest score may be totally unattainable, anything in its vicinity is considered to be an excellent score. 2014/2015 32

33. Credit Scoring Table Determining Factor Weight % Description Payment History 35%How frequent and timely you pay your credit card bills, loan installments and any form of debt, does affect your credit score. Debt/Amount Owed 30%Next most important factor that affects your credit score are the amounts of money you owe on each of your financial accounts. Credit History Length 15%The length of time over which you have used credit lines and your banking accounts also influence the score. New Credit Lines Used 10%The number of new credit lines used or banking accounts, which you have recently opened, impacts your score. Credit Types Used 10%The range of different credit types used will also influence the credit rating. 2014/2015 33

34. Credit Report Verification Please review each section for accuracy:  Personal identifying information  Credit account information  Public record information  Negative information 2014/2015 34

35. Correcting Errors on Your Credit Report  File a “Consumer Dispute.”  If you pulled your credit report online (i.e. www.AnnualCreditReport.com), your “Consumer Disputes” can be filed electronically. www.AnnualCreditReport.com  http://www.ftc.gov/bcp/edu/pubs/consumer/cr edit/cre21.shtm. http://www.ftc.gov/bcp/edu/pubs/consumer/cr edit/cre21.shtm 2014/2015 35

36. Protecting your Identity  Leave important documents at home (Social Security Card, etc.)  Keep important documents in a safe place.  Use a post office box if necessary for delivery of important documentation.  Use caution when disclosing your Social Security Number.  Protect PINs and passwords. 2014/2015 36

37. If your identity is stolen, immediately notify: Creditors & Financial InstitutionsLaw EnforcementFederal Trade CommissionDMV (for driver’s license)SSA (for Social Security Card) 2014/2015 37

38. FINAL REVIEW Are you better prepared to manage:  Student Loan Debt?  A Budget?  Your Credit? 2014/2015 38

39. Questions? 2014/2015 39

40. Navigating Your Financial Future OSFA offers a series of educational materials regarding debt management for students and borrowers. For more information, please visit: www.NavigatingYourFuture.org.www.NavigatingYourFuture.org 2014/2015 40

41. Thanks for attending this workshop. 2014/2015 41

42. Contact us  E-mail: osfa@fldoe.orgosfa@fldoe.org  Telephone: 1-888-827-2004  OSFA Outreach:  OR name  OR phone  OR email 2014/2015 42