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Managing Your Student Loan Debt
- Consider student loans only after all sources of free financial
aid have been considered and researched.
- Consider the loan programs available to you and your parents.
Federal loan programs available through Whitworth University include:
- Federal Direct Loans
- Federal Perkins Loans
- Plan an in-school and after-school budget
before taking out your first student loan.
- Manage student loan debt by deciding how much you can afford to
borrow and how much you can realistically repay.
- Estimate the student loan payment you will be expected to repay
a good credit history by repaying your student loan on time.
your lender about any changes that may affect repayment of your loan.
may include transferring
school, changing your name or address, leaving
school, or graduating.
- Consider deferments or forbearances if a situation occurs that
requires you to temporarily suspend your payments. Research loan forgiveness,
cancellation, and discharge options.
- Consider Federal Consolidation Loans if you want to consolidate
several loans into one.
of Perkins Loan.
- Understand the consequences
of a student loan default.
- Loan acceleration
- Lose rights to deferment/cancellation
- Lose rights to future financial
- Credit damaged
- Legal action taken
- Income Tax refund withheld
- Collection action/costs
Credit: Friend or Foe?
Used wisely, credit can be an extremely useful financial
tool. But, it can also be your worst enemy.
According to financial experts, most Americans are in debt to the point
where a financial crisis could put them over the edge. Yet credit use
continues to go up.
Getting out of debt is the first step to financial survival.
You know you are in debt trouble if you...
- Have debt payments that exceed 33 percent to 40 percent of your gross
only the minimum due on accounts
- Use one credit card to make payments
on the other ones
- Notice your loan balances are staying about the same--or are creeping
upward from month to month
- Put off paying one bill to
- Are past due with basic living expenses, such as rent
- Apply for additional credit cards because you have reached
your limit on the ones you currently carry
- Take advances on paychecks
or depend on extra income, such as overtime
- Use credit or tap your
savings to cover everyday living expenses
- Avoid the mail
- Worry about your debts
If two or more of these statements describe your situation, it is time
to do something about your credit.
Developing a Spending Plan
The term "budget" generally brings to
mind a feeling of negativity: money problems, financial discipline, guilt
about spending money, "I am over my head in debt." Therefore,
we will use the term "spending plan" which is a more positive
way to look at a plan for adjusting expenses to meet income.
to Develop a "Spending Plan"
- To get the maximum benefit from your income
- To prevent waste of
- To reduce money worries and frustration
- To have money
available in case of an emergency
- To plan savings and
realize future goals
- To achieve financial competence and
Characteristics of a Good "Spending Plan"?
- A guide
- Personal and unique
- Practical and realistic
- Positive and forward thinking
Six Steps to Good Financial Planning
Step 1: Set Goals to Distinguish Needs versus Wants
You need to:
- Do honest self-analysis and evaluation
- Prioritize goals
- Eliminate unreachable goals
- Put a cost and target date
on each of the remaining goals
- Pick the top 3-5 goals
to begin working on (one should be attainable in 2-3 weeks)
- Make a list of the planned spending changes
a monthly budget and frequently evaluate it
Step 2: Record Income from ALL Sources and Use Net
Step 3: Project and Track Expenditures
- Fixed monthly expenses
- Variable monthly expenses
- Periodic monthly expenses
- Track your spending by writing down everything
you spend money on and the amount spent, for a period of two weeks
to one month
Tracking will help you to do three things:
- Find out how much you are spending
- Find out what you are spending it on
- Allow you to make choices and changes
Step 4: Record Monthly Debts
- House payments or rent
- Car payments
- Credit cards
- Secured loans
- Medical bills
- IRS debts
- Student loans
- Personal debts owed to friends and family.
Step 5: Tally The Results
Total Monthly Income minus Total Monthly Expenses = Monthly Balance
Step 6: Follow the Plan with Determination
- No one is born with the ability to manage money effectively
expenditures for 30 days
- Most expenditures are easy to track
Expenses involving discretionary spending are the only ones that require
Change is not always easy, especially when it means
changing something you truly do not want to change.
If you manage your money, it will not manage you.