MY MONEY, YOUR MONEY: WE ALL NEED MONEY FINANCIAL LITERACY FOR STUDENTS AND STAFF

Division of Financial Aid

Division of Financial Aid

STUDY ON FINANCIAL LITERACY - IGRAD

85% of college students surveyed had no idea of their credit score

>80% knew how long Kim Kardashian was married (to the day)

<40% know what “Default” means

>90% knew who Justin Bieber was dating

Division of Financial Aid

MONEY MONEY MONEY

Division of Financial Aid

THIS OR THIS?

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~ atatit11e. PURDUE ........----.___ UNIVER.SITY

BUILDING THE FINANCIAL PYRAMID

Foundations Planning Process

Assessment / Goals Money Management

Taxes

Establishment Banking

Consumer Credit Housing Vehicle

Insurance Health, Home, Auto, Disability, Life

Accumulation of Wealth Investment Vehicles (Stocks, Bonds, Mutual Funds)

Long-term Planning Retirement

Estate

MY MONEY AREA

Money Smart Week in April

FINANCIAL LITERACY PRESENTATIONS Financial Planning Process Budgeting Money Management

• Importance of Emergency Funds Spending Habits

• Credit spending Student Loans Credit and Identity Theft

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MYMONEY BLOG

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MY MONEY PRESENTS TO:

Horizons 1st year Students about money management and student loans

Purdue Promise • 1st year students on money management

–Budgeting and goal setting • 4th year students on debt management

–Budgeting and loan repayment

ABC 0 E F G H I J

1 Monthly c ashFlow Worksheet 2 INCOME 3 Salary 4 Interest and dividends 5 Other 6 TOTAL 7 EXPENSES 8 Taxes

I I$ . I

9 Payroll (assume 7.65%) I $ - I 10 Income tax (assume average rate of 20% aner deduction $ -11 Total Taxes ~$ • I 12 13 Disposable Income (Income minus taxes) .....,,...-----! $ - I 14 Other Expenses 15 Housing

16 Renvmortgage § 17 Utilities 18 Repairs 19 Cable 20 Phone 21 Transportation 22 Car payment § 23 Gasoline 24 Repairs 25 Food

26 Groceries ~ 27 Restaurants 28 Entertainment 29 Clothing 30 Insurance

i~ ~::abil ity ~ 33 Health 34 Auto 35 Gins 36 Uninsured medicaUdental/\tision expenses 37 Vacations 38 Debt repayment

39 School ~ 40 Credit card (pmt on balance, nol monthly amts.) 41 Other debt payment 42 Other expenses 43 Investments

44 Goal 1 (specify) ~ 45 Goal 2 (specify) 46 Goal 3 (specify) 4 7 Goal 4 (specify) 48 Goal 5 (specify) 49 Total non-tax expenses $ -50 51 BALANCE (difference between Total Income and Total Expenses I $ - I

PURDUE ;; UNIVER.SITY

CASH FLOW WORKSHEET

FINANCIAL MEASURES Cash Flow = Income – Expenses

Liquidity Ratio = liquid assets / monthly expenses

Debt Payment Ratio = monthly debt payments / monthly after tax income

Savings Ratio = Savings / After tax monthlyincome >=10%

MEAN DEBT OF GRADUATING BORROWERS Cash Flow = Income – Expenses

Liquidity Ratio = liquid assets / monthly expenses

Debt Payment Ratio = monthly debt payments / monthly after tax income

Savings Ratio = Savings / After tax monthlyincome >=10%

STUDENT LOAN REPAYMENT OPTIONS 10 YEAR REPAYMENT PLANS

10 Year Standard Plan

All Direct and FFEL Subsidized Unsubsidized and PLUS Loans

Payments are a fixed amount of at least $50 per month.

pay less interest for your loan over time under this plan than you would under other plans.

Payments are pay more for All Direct and lower at first and your loan over

Graduated FFEL Subsidized then increase, time than under Repayment Plan Unsubsidized usually every the 10-year

and PLUS Loans two years. standard plan.

SUBSIDIZED AND UNSUBSIDIZED FEDERAL STAFFORD LOANSALL PLUS LOANS

STUDENT LOAN REPAYMENT OPTIONS EXTENDED REPAYMENT OPTIONS

Extended Repayment Plan (up to 25 years)

All Direct or FFEL Subsidized /Unsubsidized Loans or PLUS Loans (minimum $30,000)

Payments may be fixed or graduated. Up to 25 years

monthly payments would be lower than the 10-year standard plan.

pay more for your loan over time than under the 10-year standard plan

Income Based /Income Contingent Repayment Plans (IBR / ICR)

Varies between programs however between two, all Direct and FFEL Loans made to Students including consolidations

Your maximum monthly payments will be 15 percent of discretionary income, change as your income changes. Up to 25 years

Must have a partial financial hardship

If not repaid after 25 years, remaining balance is forgiven

May be taxed on amount forgiven

SUBSIDIZED AND UNSUBSIDIZED FEDERAL STAFFORD LOANSALL PLUS LOANS

STUDENT LOAN REPAYMENT OPTIONS EXTENDED REPAYMENT OPTIONS

Pay As You Earn Repayment Plan (PAYE)

Direct Loans ONLY

(must be a new borrower as of 10/1/2007 and have received DL disbursement after /10/1/2011)

Maximum monthly payments will be 10 percent of discretionary income

Payments change as your income changes Up to 20 Years

• You must have a partial financial hardship.

• You'll pay more for your loan over time than you would under the 10-year standard plan.

• If not repaid after making the equivalent of 25 years of qualifying monthly payments, any outstanding balance on your loan will be forgiven.

• You may have to pay income tax on any amount that is forgiven.

Public Service Loan Forgiveness Program (PSLF)

Direct Loan Program only

a borrower who is not in default and makes 120 monthly payments on the loan after Oct. 1, 2007, under certain repayment plans, while the borrower is employed full-time in a public service job.

100 percent of the remaining outstanding balance on an eligible Direct Loan.

You may not apply for forgiveness until after you have made all of the required 120 qualifying monthly payments.

Phone: (765) 494-5050

20

Contact Location: Room 305 Schleman Hall

Division of Financial Aid

Email: mymoney@purdue.edu