Financial Literacy: Understanding Student Loans

Financial Literacy: Understanding Student Loans


>>So this success talk is on a subject that
also does kind of come into when you talk about student success, and that’s
about finances, and talk about stress that Jennifer was talking about, that’s one
of the toughest things that students have to deal with, too, is their financial aid. You know, loans, paying the back,
all of those kind of things. So I’ve asked Scott Relke [assumed
spelling], who is our Director of Scholarships and Financial Aid, to do a talk
on, what are you calling it? Six tips — it could be more. It could be more than six, but at least six.>>At least six.>>Okay, so ladies and gentlemen, Scott Relke. [ Applause ] All right, so usually when I go
and talk to groups of people, I’m always talking about financial aid. Well, today I’m not really
talking about financial aid. I’m talking about personal finance and
some things that students can do — some tips that you can do to manage
your own finances and put yourself in the best position possible
for future success. So I went out and did a little
research on the web. Very little research on the web. There’s tons of information
out there on personal finances for college students and individuals in general. So I found six things that just seemed to really
resonate, and so we have the six easy tips for college students to put themselves — and give them a strong foundation
for money management for the future. The first thing is creating a budget. You need to be in a position where
you know your monthly income, and you need to know your monthly expenses. There are a bunch of tools
out online you can use. You can use a spreadsheet
to track your expenses. You can use a piece of paper with a
line down the middle with the income on one side and the expenses on the other. It doesn’t matter what you do, as long
as you use some sort of tool to budget. It’s important to get a good estimate. You start off with an estimate,
and as you get experience, if you’ve been through the fall semester, you got an idea of how your expenses run
throughout the course of the semester. If you are using financial aid, using that, what
kind of income are you going to have from that? Other income from work. You got a good track record by now, and
if you haven’t reduced that to paper, put it down to find out your expenses versus
your income, now is a good time to start. So, you just go through that exercise, just know where you are every
month, and use that estimate. If it doesn’t quite come out right on
budget that month, then you just need to make your adjustments and move forward. On the expense side, make sure you’re taking
into account your supplies for school, food, food expenses, those types of
things, personal care items, laundry, all those types of expenses
that you have out there. Another thing that’s important to do
when you’re working your finances is sure that your separating wants from needs. So, you know, if you’re spending
$15 a week on coffee at a drive-through, is that a need or a want? You know, you could buy a coffee maker, make it
at home, throw it in a thermos, and bring it in. So those types of things, as well. So you need to know. And you need to budget for things, as well. You know, your budget at home for your food,
that sort of thing, for your meals at home, but are you budgeting appropriately
for meals away from home? Because if you’re not there, obviously,
you got some expenses there, as well. So again, you have to make
sure you keep track of that. And again, as I said before,
after a couple of months, it becomes easier to track those expenses, get
a track record of what is going to cost you on a weekly basis and put that
into a weekly or monthly budget. Set up a checking account. Banks and credit unions usually
offer free accounts to students, and so if you don’t have one,
and you get that account set up, so you have a place to conduct your finances. That also helps if you get into a bank
or credit union that allow students to have an ATM card or debit card without fees. So you’re not racking up fees
on all of your transactions. So make sure, if you’re doing that,
you’re working with an institution that has an ATM that’s close to campus, that’s
easily accessible for you, so you’re not racking up all those fees for every
transaction you have. Another tip that’s out there is just to rather than swiping the debit card every time
you’re making a purchase, operate on cash. Carry a week’s worth of cash with you
for those wants that we were talking about in the last thing, and just
use that cash as you come in, and then when that’s out,
you go to the next week. Keep in mind, too, when you
receive checks in a bank account, you need to make sure you’re allowing
enough time for a bank transaction to clear. Sometimes you may have checks coming in
from out of state or from another location. They take a little while for those to clear. So just make sure that you
keep that in mind, as well. Students get bombarded with credit card offers. So credit cards aren’t necessarily a bad thing, but you need to make sure
you’re using them properly. It’s a good way for folks to, you know,
build credit if you don’t have it, to repair credit if you have issues with
that, but it’s important to make sure that you’re using that tool in that manner
and not abusing it, and you need to make sure that when you’re using a card like
that, you’re not overextending yourself. When it comes to — a little bit I
said I was going about financial aid. I’ll talk a little bit about financial aid. When it comes to loans and borrowing money to
go to school, what you need to do is you need to know where you’re going
to wind up at the end. So you’re in a program here. You have a major, and you should have an idea of
how long it owing to take you to complete that. What you’re going to need to do over that course
of time, as far as borrowing for student loans. And so you should be able to project
where you’re going to be as far as your student debt levels at that time. So it’s now a good time to start making plans. If you know what your future career
is going to be, do some research. Figure out what the salary levels are for those
types of employment, and start getting an idea of what kind of income you’re
going to have, in order to help pay on those student loan payments later on. We have a tool that’s available to students under a three-year grant
we have from North Star. The product’s called Grad Ready. You have some bookmarks in the back. The bookmarks look like this, so
Riley, in the back, has those. So grab one of those in the way out and all
the things we’re talking about here today, whether it’s budgeting, the student loan
tracking, all these types of things, Grad Ready has tools out there for you to use. They also have little videos, as well,
to explain processes like repaying loans and budgeting, all that type of
information is out there on that site. It’s free. You have to create an account
like any website to get into it. But it’s free for our students, and
so grab a card in the back today. Log on there. Use the tool, and that can help
you get your finances organized. Number six I have on here. Is there anybody in here from North Star? Good. Okay, so last thing I have here, last
tip we have is to shop smart for textbooks. And so textbooks are one of the largest college
expenses, probably, after tuition and fees and some of your living expenses. So textbooks are expensive. So at times, if it’s appropriate, if you can
find material that you need from a source other than our bookstore, bypass the campus
bookstore and buy books online. Look for used books, that type of thing. So again, budget wisely. It is your money. You need to spend it wisely. If there’s something that you need
that’s in the bookstore, that’s great. But you know, buy them online, and even after
you buy books online, with shipping, any times, it could be cheaper to buy the locally. Natalie?>>Buying an outdated edition, like one
edition below, can possibly be okay. All you have to do is Google what’s the
difference between the first edition and the second edition, and
generally, it’s just a paragraph, and that previous edition is much cheaper. But –>>I would say check with your instructor. Check with your instructor. I see instructors’ hands going up like this. That’s a good tip, but check
with your instructor to make sure that’s appropriate to do. Anyway, the bottom line, everybody knows. You’re all here. You all realize how expensive college can
be, but what you’re doing now is in addition to gaining the knowledge and the skills that
you’re going to need throughout your career, it’s also a good time to gain some other
skills, as well, as far as budgeting and keeping track of your finances. And one last thing we have
here, too, there’s another tool. There are a lot of times we hear about students,
or students call up, and they don’t know who their student loans are being serviced by. And so you can find that information. Just like any service, you can
find that information anytime. You can find out whose service in your
student loans at any time by going to the National Student Loan Data System. And so you can Google National
Student Loan Data System for students. It’ll take you right to their webpage. You can login and see what you borrowed, who
your lender is, and who you need to contact, and so those are just a few
tips that I have today. I’m going to run away under my 15
minutes, because that’s all I have, unless somebody has some questions? You’re a quiet group today. One way in the back. [ Inaudible Speech ] I believe that the faculty
is investigating that. The question was about open-source
textbooks are we looking at that? I think not only here, but I think,
probably nationwide folks are looking at having open-source textbooks
as being one option for students. So they’re working on that. Did you want to say something?>>I was just going to say that there
are a lot of open-source options for general education courses, but some of our technical courses,
it’s more challenging to find.>>A good person to talk to about
open-source is our librarian, Michael. [inaudible].>>So the comment was the best person to talk to about open-source textbooks
would be Michael, our librarian. Okay, I’m going to wrap it up for their and give
it back over to Pat Lair [assumed spelling]. Thanks, Pat.>>[inaudible] a round of applause. Wow.

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