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Warm-Up 2/12/16

• If you make $8.25/hour, work an average of 25 hours per week, and lose 20% to taxes, what is your annual NET pay?

• If you are paid a salary of $40,900 and lose 20% to taxes, what is your annual NET pay?

I Can’t Afford to Go to College

Should I work for a semester or two to save up cash?

To get a loan or not… that is the question…

Age Annual NetIncome

18 4 years of college.19

20

21

22

23

24

25

26

27

TOTAL:

What if I get $4,000 in student loans each

year of college?

Estimated median household income in 2013: $49,289

http://www.city-data.com/city/Las-Vegas-Nevada.html

Salary contract.$40,900

38 weeks14 weeks unpaid

-20% taxes

$8.25/hour25/week52 weeks

-20% taxes

http://www.city-data.com/city/Las-Vegas-Nevada.html


Age Annual Income

18 4 years of college.

$8,580

19 $8,580

20 $8,580

21 $8,580

22 $32,720

23 $32,720

24 $32,720

25 $32,720

26 $32,720

27 $32,720

$230,640 TOTAL:


-20% taxes



-20% taxes

Total student loan amount = ___________

Current student loan rates: 4.29%

Pay $696.87 per month for 24 months.

Total interest = $724.78

Total Amount Repaid = _____________

Total income for these 10

years AFTER paying off

student loans.


Annual Net Income

18

19


$8,580

21 $8,580

22 $8,580

23 $8,580

24 $32,720

25 $32,720

26 $32,720

27 $32,720

TOTAL:

What if I want to work so I can pay cash for college?$8.25/hour

40/week52 weeks

-20% taxes


-20% taxes



-20% taxes

By working full time, you will make

$____________ more every year that

can be saved for college.

This means that for these 2 years of

work, you will have saved an extra

$___________ for college.

Assuming college costs don’t increase –

you will have to come up with $4,000

per year, you will still need to borrow

$__________ to pay for college.


Annual Net Income

18 $13,728

19 $13,728


$8,580

21 $8,580

22 $8,580

23 $8,580

24 $32,720

25 $32,720

26 $32,720

27 $32,720

$192,656 TOTAL:

What if I want to work so I can pay cash for college?

Making $5,148 more every year.

Save an extra $10,296 for college.

Only need to borrow $5704 to pay for college. (Assuming scholarships and costs all the same as 2 years ago.)


-20% taxes


-20% taxes



-20% taxes











Which life path results in higher pay over the next decade of your life?

_________________________________



student loans.



student loans.


Annual Income


$8,580

19 $8,580

20 $8,580

21 $8,580

22 $32,720

23 $32,720

24 $32,720

25 $32,720

26 $32,720

27 $32,720

$230,640 TOTAL:

Pay off loans quick, cuts total earnings down to $213,915.22

Annual Income

18 $13,728

19 $13,728


$8,580

21 $8,580

22 $8,580

23 $8,580

24 $32,720

25 $32,720

26 $32,720

27 $32,720

$192,656 TOTAL:

Pay off loans quick, cuts total earnings down to $186,693.62

That’s $27,221.60 LESS than if you had gotten student loans!

I can earn just as much without having to go to college.

I can’t afford to go to college…Annual Income

Annual Income

$24,960 18 4 years of college.

$8,580

$24,960 19 $8,580

$24,960 20 $8,580

$24,960 21 $8,580

22 $40,900

23 $40,900

24 $40,900

25 $40,900

26 $40,900

27 $40,900


-20% taxes

$165/week

$15/hour40/week52 weeks

-20% taxes

$480/week

$16,640 more per year!!!


Annual Income


$8,580

$24,960 19 $8,580

$24,960 20 $8,580

$24,960 21 $8,580

$33,280 22 $40,000

$33,280 23 $40,000

$33,280 24 $40,000

$33,280 25 $40,000

$33,280 26 $40,000

$33,280 27 $40,000

TOTAL: $299,520 $274,320 TOTAL:


-20% taxes

$165/week


-20% taxes

$480/week


-20% taxes

$640/week


52 weeks2 weeks PTO-20% taxes

$961/week

$6,720 more per year!


Annual Income


$8,580

$24,960 19 $8,580

$24,960 20 $8,580

$24,960 21 $8,580

$33,280 22 $64,000

$33,280 23 $64,000

$33,280 24 $64,000

$33,280 25 $64,000

$33,280 26 $64,000

$33,280 27 $64,000

TOTAL: $299,520 $418,320 TOTAL:


-20% taxes

$165/week


-20% taxes

$480/week


-20% taxes

$640/week


52 weeks2 weeks PTO-20% taxes

$1,231/week

$30,720 more per year!!!


Annual Income


$8,580

$24,960 19 $8,580

$24,960 20 $8,580

$24,960 21 $8,580

$33,280 22 $32,720

$33,280 23 $32,720

$33,280 24 $32,720

$33,280 25 $32,720

$33,280 26 $32,720

$33,280 27 $32,720

TOTAL: $299,520 $230,640 TOTAL:


-20% taxes

$165/week


-20% taxes

$480/week


-20% taxes

$640/week



-20% taxes

$861/week

$560 LESS per year!

Most entry level jobs don’t start @ $15/hour


Annual Income


$8,580

$13,728 19 $8,580

$13,728 20 $8,580

$13,728 21 $8,580

$22,084 22 $32,720

$22,084 23 $32,720

$22,084 24 $32,720

$22,084 25 $32,720

$22,084 26 $32,720

$22,084 27 $32,720

TOTAL: $187,416 $230,640 TOTAL:


-20% taxes

$165/week


-20% taxes

$264/week


-20% taxes

$424/week



-20% taxes

$861/week

$10,636 LESS per year – even with!

What else isn’t being accounted for?

Salary jobs come with BENEFITS.

• Health insurance coverage

• 401(k) matching

• PTO

• Lower risk of injury – potentially career ending

• Lower health risks

• Less competition for the job

• Higher job security

Salary jobs come with BENEFITS.

• Last year’s pay scale for 1st year teacher shows that in addition to salary, $16,937 in benefits.

• These would all come out of your own pocket if your job doesn’t have benefits.

Is there any way I can get my student loans forgiven?

“Obama Student Loan Forgiveness Program” aka William D. Ford Direct Loan Program:

• Standard Repayment:

• Graduated Repayment:

• Income Contingent Repayment:

• Income Based Repayment:

• Pay as You Earn (PAYE):

Limit your monthly loan payments to

10-15% of your monthly

discretionary income.

After 20-25 years of monthly

payments, loan balance is forgiven.

Payments start lower than Standard, and

gradually increase over time.

“Public Service Loan Forgiveness”

After 10 years or 120 payments on your student loans, loan balance is forgiven.

Requirements:

• Student loans must be “Direct” student loans.

• You must work full-time for a government agency, a tax-exempt non-profit or a non-tax-exempt non-profit that provides the following services:• Emergency management• Military service• Public safety or law enforcement• Public health, education, or library services• Early childhood education• Public interest law services• Public service for those with disabilities and the elderly..

“Public Service Loan Forgiveness”

• All 120 payments must be on-time. (Not early or lump-sum.)

• Must be enrolled in ICR, IBR, or PAYE plan.

• Must be a full-time employee for the 10 years of payments.

“Teacher Loan Forgiveness”

Have $5,000 - $17,500 of student loan debt forgiven.Requirements:• Work 5 consecutive years full-time at a low-income

school/Title 1 school• (School must be on Federal list when you begin teaching

there.)

• If you teach secondary math, science, or elementary special ed. you are eligible for up to $17,500 of forgiveness.

• All other teachers only get up to $5,000 forgiven.• Have a degree in education directly related to your

teaching position.

“Perkins Loan Cancellation & Discharge”

• Perkins loans are only granted to students in “exceptional financial need”. A % can be forgiven every year you work in public service careers such as: • Peace Corps• Teacher• Military• Nurse or medical technician• Law Enforcement• Head Start• Child or Family Services• Professional provider of early intervention services.

• Eventually, 100% of your Perkins loans can be forgiven.

The RISKS:

• Congress votes to change forgiveness programs before you receive forgiveness.

• You work at the “wrong place”.

• You hate your career after 1-2 years.

• Paperwork problems:• Turned in late

• Missing signature

• Documentation problems• East Tech vs. East Career & Tech vs. East Career & Technical

Academy

The easiest solution:

• DON’T BORROW MORE THAN YOU CAN PAY BACK QUICKLY!

• If you won’t be able to pay it back without loan forgiveness you probably SHOULDN’T DO IT!

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