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Financing Higher Education

2.1 Financing Higher Education, Renting vs. Owning,

Insurance and Taxes, and Consumer Fraud

Learning Goal: The student will understand the impact of personal finance decisions related to education, housing, insurance, taxes, and consumer fraud. Performs complex skills: Critique the advantages and disadvantages of renting versus owning a house, and or leasing

or purchasing a vehicle for personal use Evaluate the risk of establishing credit in a world where identity theft is commonplace Assess the factors and processes involved with applying for, using, and repaying a student

loan Identify problems associated with balloon mortgages Compare and contrast the types of insurance policies in the marketplace available for

consumers

Performs basic skills:

Identify simple ways to protect oneself from consumer fraud

Summarize the mortgage and lending process, and explain the difference between fixed and

adjustable mortgage rates

Describe the student loan process

Explain the difference between a student loan and a grant

Vocabulary

The student recognizes or recalls specific terminology:

FAFSA loan, Depreciation, Appreciation, Master Promissory Note, Loan

Payback Schedule, Mortgage, Tax Incentive, Lease, Fixed and Adjustable

Rate Mortgage, Balloon Payment, Lien, Foreclosure, Sales Tax, Income Tax

Bracket, Property Tax, Capital Gains Tax, Tax Form (1040, W4, W2), Net vs.

Gross Pay, Base Salary, Health, Homeowners, Renter’s, and Auto Insurance,

Deductible, Premium, Consumer Fraud, Fair Credit Reporting Act, Fair Debt

Collection Practices Act, Truth in Lending Act, Phishing scam, Credit &

Banking Fraud

Career Comparison Worksheet Instructions: Log onto the Bureau of Labor Statistics “Exploring Career Information”

website at http://www.bls.gov/k12/. Using the worksheet below, research and compare three jobs based on your areas of interest.

• Job title

• What does someone with this job do?

• What is the median salary?

• How do you get this job?

• Do you need a college degree?

• What is the job outlook? (Industry growth)

• Using the information above, what do you think are the pros

and the cons of this job?

Career Comparison Worksheet: Final Reflection

Based on the careers you are interested in and the jobs that you explored in this

exercise, what will you need to know or do to prepare for the career you want?

• What kind of education do I need beyond high school?

• What kind of skills do I need to learn?

• What areas do I need to improve in? (Either in school or

outside of school)

• What websites, books or people can provide me with more

information about careers?

With the

current

tuition

trends, how

will I be able

to afford

college?

Let’s start

with FAFSA!

FAFSA is the Free Application For Federal Student Aid

https://www.youtube.com/playlist?list=PL23B9A23CD8DD82DD

1. Open the YouTube playlist that describes the process of filling

out the Free Application for Federal Student Aid (FAFSA).

2. Your objective while viewing video clips two through six is to

assess the factors and processes involved with applying for,

using, and repaying a student loan.

3. Write a description of the student loan process, and explain

the difference between a student loan and a grant.

• For more information about the FAFSA, visit StudentAid.gov.

Analyze The Student Loan Debt Crisis in 9 Charts

With over $1 trillion in debt, millions in unpaid loans, and the current rate of unemployment among college graduates at almost 50%. How will you finance your education?

The amount of total student loan debt has soared in the past decade, shooting up from $240 billion at the start of 2003 to over $1 trillion today.

• Analyze the data in the following slides. You will need to reference this data in an essay

comparing the cost and benefits associated with obtaining a college degree.

So, Is College Worth It?

Watch one of the following videos which ask the question, “Is College Worth It?”

60 Minutes

https://www.youtube.com/watch?v=u7ZBOBZUyiU

Dirty Jobs' Mike Rowe on the High Cost of College

https://www.youtube.com/watch?v=qzKzu86Agg0

Write a summary of the video you just watched. Include an analysis of the information

discussed and write whether you agree or disagree with the author’s stance.

Presentation by Bill & Melinda Gates

Answer the following questions as you view the slides.

1. Why do you believe the unemployment level drops as the level of education obtained increases?

2. How does Florida compare to the nation in regard the percentage change in college enrollment?

3. What is the current trend in state funding for higher education?

4. Compare the cost of education at a two year college vs. a four year college in 2012-2013.

5. What is the current level of annual spending on Pell grants?

6. Why do you believe the average college debt per borrower has been on the rise since 1996?

7. What percentage of students graduate on time from a four-year institute and from a two-year

institute? Why do you think so many students drop out of college?

8. By 2018, what will happen to job availability when compared to the number of college graduates?

9. Why do you believe federal grants don’t guarantee student success?

10. How might technology change the way we receive an education?

Source: Bureau of Labor Statistics, Current Population Survey

Source: State Higher Education Executive Officers

Source: State Higher Education Executive Officers

Source: U.S. Department of Education, National Center for Education Statistics, Integrated Postsecondary Education Data System (IPEDS)

2-YEAR COLLEGES 4-YEAR COLLEGES

Source: College Board, Trends in Higher Education

Source: Project on Student Debt

Source: U.S. Department of Education, National Center for Education Statistics

Source: OECD

Source: U.S. Department of Education, National Center for Education Statistics).

Don’t cut more. We have already cut higher education to the bone, and it’s critical to economic growth and opportunity.

Get more productivity out of federal grants and loans. Find credible ways to help institutions and students receiving them raise graduation rates.

Focus on today’s students: working, raising children, and enrolled part-time.

What's the value of a college degree? Turns out education improves everything from health to marriage (Julie Mack blog) For all the depressing student loan and job statistics,

there's a huge and growing body of research that

suggests college graduates have any advantage in

almost every aspect of life.

Let's look at that research.

-- Being employed: Unemployment among those with a bachelor's degree

was 4.1 percent in December, compared to 7.7 percent

for those with an associate's degree or some college,

8.7 percent for those with a high school degree and no

college, and 13.8 percent for high school dropouts.

-- Earning ability:

U.S. median income goes up steadily with educational

attainment. Check out the chart at right from the U.S.

Bureau of Labor Statistics, which indicates that U.S.

median income in 2010 for high school graduates was

$626 a week compare to $1,038 for those with bachelor

degrees and $1,272 for those with a master's.

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-- Marriage:

Data suggests that college-educated Americans are

more likely to get married, stay married and have

happier marriages. A 2010 report from the Pew

Center looks at Census numbers that look at marriage

and divorce by educational attainment. Meanwhile, a

2010 report by the University of Virginia reports that 69

percent of college graduates describe their marriage

as "very happy" compared to 52 percent of high

school graduates.

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-- Children:

Children of college-educated parents are more likely to

be raised in a two-parent families, have better

health, and have better school performance than

children with parents who did not attend college. The

children of college-educated parents are also much

less likely to grow up in poverty and much more likely

to enroll and succeed in higher education.

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-- Health:

Even taking income into account, there's a strong

correlation between education and a person's health.

College graduates live longer and have better health

than those with less education. A report by the Robert

Woods Johnson Foundation indicates that college

graduates can expect to live five years longer than

those with just a high school degree.

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-- Civic engagement:

Despite the stereotype that college graduates are more

skeptical of religion, recent data indicates that weekly

church attendance is more common among those with

more education. College graduates also are more

likely to participate in other types of civic

engagement.

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-- Happiness:

It's absolutely true that a college degree isn't

a guaranteed ticket to happiness. But, on the

whole, people with college degrees tend to report a

better sense of well-being -- which makes sense if, on

the whole, they're earning more money, have more

stable home lives and better health.

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Essay Assignment:

What are the costs (both real cost and opportunity

cost) associated with obtaining a college degree and

what are the benefits (analyze short term and long

term benefits)? (You must reference the documents in

this presentation.)

Essay Topic: (Every Paper must include a strong

thesis statement. The thesis statement must be

underlined.)

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A thesis statement:

is a road map for the paper; in other words, it tells the reader what to expect from the rest of the paper.

directly answers the question asked of you.

makes a claim that others might dispute.

is usually a single sentence somewhere in your first paragraph that presents your argument to the reader. The rest of the paper, the body of the essay, gathers and organizes evidence that will persuade the reader of the logic of your interpretation. • © 2010-2012 by The Writing Center at UNC Chapel Hill.

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How to Generate a Thesis Statement

Almost all assignments, no matter how complicated, can be reduced to a single question. Your first step, then, is to distill the assignment into a specific question. For example, if your assignment is, “Write a report to the local school board explaining the potential benefits of using computers in a fourth-grade class,” turn the request into a question like, “What are the potential benefits of using computers in a fourth-grade class?” After you’ve chosen the question your essay will answer, compose one or two complete sentences answering that question.

Q: “What are the potential benefits of using computers in a fourth-grade class?”

A: “The potential benefits of using computers in a fourth-grade class are . . .” • OR

A: “Using computers in a fourth-grade class promises to improve . . .”

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Thesis Statement Examples:

WEAK - World hunger has many causes and effects.

STRONG - Hunger persists in Glandelinia because jobs are scarce and farming in the infertile soil is rarely profitable.

WEAK - Companies need to exploit the marketing potential of the Internet, and Web pages can provide both advertising and customer support.

STRONG - Because the Internet is filled with tremendous marketing potential, companies should exploit this potential by using Web pages that offer both advertising and customer support.

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