Financial webinar: College Money 101 with Alex Erath – big takeaways

Notes/big takeaways from our session:

there are tools and resources – we can help!!
amortization calculator: https://www.creditkarma.com/calculators/amortization
subsidized vs unsubsidized loan: does the loan start accruing interest before you graduate? Or can you wait to make payments till you’ve graduated?
- subsidized: NO interest until after you’ve graduated; usually between 6-10 months “deferred”; means you don’t have to pay
- unsubsidized: starts accruing interest as soon as you take out the loan
credit card repayment calculator: https://www.creditkarma.com/calculators/debtrepayment
what I can’t calculate on an amortization calculator – what happens if I make a payment that doesn’t cover the interest every month
compounding: if you don’t make your full payment, your base amount grows
- how interest works!
ParentPLUS loans – your parents take the loans out, rather than you
make sure that you get a life insurance policy to take care of your loans if you die – so that your parents don’t have to pay for them: https://thecollegeinvestor.com/9675/student-loans-die/
- when ParentPLUS loans are discharged/dismissed, the IRS treats it as income
- get a 50K policy – term life – it’s a few dollars per month. Will cover income tax, funeral expenses, etc
When do you buy insurance? For the risks you can’t afford to take
If you have a subsidized loan, and pay it off as soon as you’re done with school, the amount of loan still stays the same right? YES

Repaying loans:

10-year pay-off term
20-year pay-off term
income-based repayment <- avoid this! almost never covers the principal – so the amount you owe isn’t getting smaller

inside 10- and 20-year options – either plan – you owe the same amount of money

fixed/level payment – never changes over the entire period of time you’re paying off the loan
graduated payment amount – predicated on the belief that your salary/income will increase

read through every single one of your loan contracts!!!