College Financial Aid Seminar Summary

financial-aid-10111Recently we held a Financial Aid Seminar presented by Ken O’Connor, Director of Student Advocacy for CUStudentLoans.org. Ken talked about important information from costs of colleges, to breaking down the FAFSA (Free Application for Federal Student Aid). Here are a few of many key points you may have missed out on, that are important to know:

• The cost of attendance depends on the type of school: public 4 year, private 4 year, and for-profit 4 year colleges/universities.

• College financing options: 529 Plan, monthly savings plan, personal liquidity, prepaid plan, and school selection.

• The top 5 school selection criteria for today: cost, career, major, school reputation, and commuter/resident.

• Cost of education: tuition and expenses, loan repayment, and monthly commitment to pay off studentloans.

• Atypical financial aid bill: Approximately $18,900 (tuition, room, board, books, transportation, etc.)

• Pay off tuition bills with scholarships, grants, and Federal Direct Loans.

• Get the FASFA filed and submitted before February 15th. Don’t be late! www.fafsa.ed.gov.

Questions on First Financial’s Private Student Loans or Student Loan Consolidation? Learn more here or call 866.750.0100, Option 2.*

For more key points visit our Twitter page to view the seminar’s live Twitterfeed at twitter.com/njbanking and search #FinancialAidSem.

*Private student loans should be used as supplemental funding after exhausting all other sources of financial aid, including grants, scholarships, and federal student loans. Federal loans offer more attractive terms when compared to most other borrowing options, including private student loans. For more information on federal loans, visit http://www.fafsa.ed.gov.

Ken O’Connor is an 11 year veteran of higher-education finance, having served thousands of students and parents during his career as a financial aid counselor. Having assisted so many families, each having their own specific financial and educational needs, Ken has gained experience in creatively solving a multitude of the financial problems that arise with attending college.

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Tuition-Free Colleges: They Do Exist!

College_Students_TUNo that’s not a typo or misstatement. Did you know that more than a dozen colleges offer a four-year, tuition-free education? During difficult economic times, the cost of higher education leaves many students wondering if they can afford to go to college. For those who want to avoid being saddled with huge loans, these schools may provide a great alternative.

Miscellaneous expenses

Although the colleges don’t charge tuition, most charge for room and board and other incidental expenses such as books, supplies and equipment, transportation, health insurance, personal expenses and so on. Many require students to work and several are located in rural areas.

These colleges include:

Armed Forces colleges
The various Armed Forces colleges, including the U.S. Military Academy (West Point, NY), U.S. Naval Academy (Annapolis, MD) and U.S. Merchant Marine Academy (Kings Point, NY), do not charge any tuition.

It’s all about options
Students and parents concerned about how they’re going to pay for college might want to consider one of these tuition-free schools. Although there are not that many of them, they may be an attractive option for those looking to walk away from college debt-free or with minimum debt. 

If you and your child decide against these tuition-free schools, First Financial provides low-rate Student Loan options.* Sometimes you just need a little help paying for college and Federal Loans may not be enough to cover the cost of a college education. You may need another Student Loan and we have one you can apply for!

Benefits:

  • Competitive interest rates – and get even better rates when you have GOOD GRADES
  • 1% interest rate reduction – when you pay off 10% of your loan
  • 30 day No-fee return policy – allows you to cancel the loan if you find a better option
  • Zero origination fees for all qualified student borrowers

Loans can be used for:

  • Tuition
  • Room & Board
  • Books & Computers
  • Past due tuition bills

Remember, knowledge is power!

*Click here to view the article source.

* Private student loans should be used as supplemental funding after exhausting all other sources of financial aid, including grants, scholarships, and federal student loans. Federal loans offer more attractive terms when compared to most other borrowing options, including private student loans. For more information on federal loans, visit http://www.fafsa.ed.gov.

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How to Manage Multiple Sources of Debt

CreditCard_With_MoneyAs young adults struggle to get out from student loan debt, which averages a whopping $26,000 per student, according to The Project on Student Debt, they’re shying away from taking on other forms of debt.

A recent study released by the Federal Reserve Bank of New York found that college graduates are now less likely to take on a mortgage or even an auto loan by the age of 30—reversing a historic trend of home ownership.

But what do you do if you are already shelling out monthly student loan payments but also want to buy a house or car? Taking on multiple types of debt is a balancing act and it can be easy to get financially overwhelmed.

The first thing you should do when thinking about taking out another loan is to determine your total monthly payments for current outstanding debt and the amount you’re looking to borrow. Then, figure what percentage of your monthly income would go towards paying off that debt.

“We recommend that no more than 30% of your take-home pay go toward housing costs [like a mortgage, taxes, and insurance] and no more than 20% of your pay go toward servicing other debt [such as a car loan or credit cards],” says Gail Cunningham, vice president of membership and public relations for the non-profit National Foundation for Credit Counseling.

Exceed these percentages, and you could find yourself burdened with a crippling amount of debt. “Make sure that the additional debt is absolutely necessary,” Cunningham stresses.

Before taking out a loan, experts suggest having a repayment plan in place.

Everyone’s pay-back strategy is different, so find one that best fits your financial needs and lifestyle to make the plan sustainable.

Some borrowers find that it’s motivating to pay extra towards the smallest loan in order to quickly eliminate it. For example, if you have a car loan that has an outstanding balance of $5,000, and you also owe $27,500 for a student loan, pay extra each month on the auto loan to rid yourself of it as soon as possible.

But if paying the least amount of interest over time is the most important thing, focus on paying off the loan or credit card with the highest interest rate first while meeting the minimum obligations on the others.

If you already have an auto loan or credit cards, before taking on additional debt, you may want to consider refinancing the loan or getting a lower rate credit card by doing a balance transfer. For example, if you took out an auto loan when rates were higher, refinancing it at a lower rate may make sense depending on the balance and time remaining.

Likewise, you can pay down the principle of a higher rate credit card faster if you transfer the balance to a lower interest rate credit card, provided you continue to make the same monthly payment (and it’s more than the minimum due). As an example, a $200 payment on a card with a $50 monthly minimum will reduce principle for a card with 3% interest faster than one with 15% interest. Just be sure to read the fine print regarding the cost to transfer the balance and when the introductory rate will end.

Did you know First Financial has no balance transfer fees? Transfer your high rate credit card balances over to a First Financial Visa Platinum Credit Card – fee free!* And, if you are looking to refinance your current auto loan – give First Financial a call at 866.750.0100, Option 2 or stop into any branch location to see what you may be able to save on your monthly payments.**

Finally, if you discover yourself getting overwhelmed by the repayment process or find that you can no longer meet your monthly repayment obligations, consider talking with the company or meet with a credit counselor to consolidate debt, reduce interest rates or create a new repayment schedule, or even possibly getting some of your debt forgiven.

For a FREE and anonymous online debt management tool, try Debt in Focus. In just minutes, you will receive a thorough analysis of your financial situation, including powerful tips by leading financial experts to help you control your debt, build a budget, and start living the life you want to live!

Click here to view the article source.

*APR varies from 7.90% to 17.99% when you open your account based on your credit worthiness. This APR is for purchases, balance transfers, and cash advances and will vary with the market based on the Prime Rate. Subject to credit approval. No Annual Fee. Other fees that apply: Cash advance fee of 1% of advance ($5 minimum and $25 maximum), Late Payment Fee of up to $25, Foreign Transaction Fee of 1% plus foreign exchange rate of transaction amount, $5 Card Replacement Fee, and Returned Payment Fee of up to $25. A First Financial membership is required to obtain a VISA Platinum Card and is available to anyone who lives, works, worships, or attends school in Monmouth or Ocean Counties.

**First Financial membership is required for an Auto Loan and it’s available to anyone who lives, works, worships, or attends school in Monmouth or Ocean County. $5 savings account required for membership. Verification of your identity is required. Income verification is required. Subject to credit approval. Credit worthiness determines your APR. Certain restrictions apply. Contact the credit union for details of the offer.

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College Saving Secrets

college-savings-plansThese days, it’s probably a toss-up who’s more nervous about college: you or your child. Graduates leave school with an average of $26,600 in debt — but you don’t have to leverage your 401(k) if you want to contribute. All it takes is a little planning and help from your teen to cut costs and minimize loan payments.

Do Prep Work

Assess your retirement savings. Invest in yourself first: Start putting money into a 401(k) or Roth IRA before contributing to your child’s college bills. “You can’t take out a loan for your retirement,” says Carol Stack, coauthor of The Financial Aid Handbook. “And you don’t want to end up relying on your kids to support you.” Use an online calculator like the ones on our website to find out how much you should be setting aside each month. By keeping your savings goals on track, you may have more leeway to fund your child’s education.

Discuss your contribution. It’s not easy to talk about finances with your children, says Stack, but if your teen is counting on you to help pay for school, she has to know whether and how much you plan to give each year. First Financial provides College Savings Calculator, along with many other financial calculators, than can be found here (scroll towards the middle of the page)! You’ll also want to check our blog post about the new standards for teaching your kids about money.

Save without budgeting. If you’re maxed out on what you can set aside for college, consider signing up for a rebate plan. Sallie Mae’s Upromise program offers as much as 8% back on your purchases, which can then be applied toward tuition. Before your teen enrolls in school, the rebates can be transferred into a 529 plan; after your child graduates, the reimbursements can be put toward loan payments. (Grandparents and other relatives can also sign up.)

Have “the other talk.” Choosing a university requires thought and planning. Most teens don’t decide on their top colleges until junior or senior year of high school, says Scott Weingold, cofounder of College Planning Networking. Even then, many make choices based on where their friends are going. “Starting at the beginning of their sophomore year, talk to them about what their strengths and interests are and what they like to do,” he says. “College is obnoxiously expensive enough — now add on that it’s not uncommon for kids to take up to six years to graduate.” So get them thinking in advance about schools, majors and potential careers.

Win the Scholarship Game

Start early. Even if your teen is years away from college, they should apply for scholarships. “You’d be surprised how many there are for elementary school students,” says Mark Kantrowitz, publisher of FinAid.org. Some examples are spelling, art and writing awards — not to mention a seriously lucrative $25,000 Jif prize for the most creative peanut butter sandwich. Find a list of possibilities at finaid.org/age13. Some school assignments (like a science fair project or an essay) can even qualify.

Search online. College students earn an average of $2,800 in scholarships, according to one report, making it among the best ways they can save for school. “Every dollar they are awarded is a dollar less they have to borrow,” says Kantrowitz. The best sites include ScholarshipAmerica.org, Fastweb.com, and CollegeBoard.org. Here’s how your child can maximize her efforts:

  • Rule #1: Fill out the entire profile. Scholarship “matching” sites find awards for teens by asking them to complete detailed questionnaires about themselves. Answering all the questions, including the optional ones, says Kantrowitz, will yield more results.
  • Rule #2: Apply for (almost) everything. If a student isn’t eligible for a scholarship — let’s say, they just barely missed the GPA requirement — then they can skip it. Otherwise, your teen should pursue all potential matches, says Kantrowitz. “Many applications are essays that require personal statements. The first half dozen or so will be labor intensive, but after that kids can start recycling answers,” he says. Teens should set up a Google Calendar with due dates for all scholarships and make sure they’re aware of how much time they’ll need to complete the paperwork.
  • Rule #3: Beware of scams. The biggest red flag is being asked for an application or processing fee. “Legitimate providers want to give you money, not take it from you,” says Kantrowitz. “Never invest more than a postage stamp.” Also be wary of sites that ask for personal information, like a bank account or Social Security number.

Encourage community service. Schools aren’t the only organizations that value teens who volunteer. “It looks good to many scholarship providers too,” says Lauren Segal, CEO of Scholarship America. “And it can be the tipping point for winning.” Keep in mind that colleges like to see a history of service — not just a few stints started in junior year.

Go door to door. If they’ve exhausted paper and online searches, students can visit local organizations like the Rotary club, church groups and nearby businesses to ask about scholarships. You and your spouse should also check with your human resources departments: “I’m amazed at how many companies offer grants to the children of employees,” Segal says.

This year, our non-profit organization — the First Financial Foundation – will be awarding (3) $1,000 scholarships to undergraduate students who apply on or before July 31, 2013 for its Erma Dorrer Literary Scholarship. Click here to learn how to apply today!

Keep your teen’s Facebook account appropriate. According to a new report, about one in four scholarship providers check their finalists’ online profiles. “Companies want to find students who reflect well on them,” says Kantrowitz. “They search for inappropriate behavior and offensive language, and even look at students’ natural writing style to see whether their parents probably wrote the essay for them.”

Strategize Your Search

Target a range of colleges. Include a few options that won’t leave your family or child with too much debt. “You don’t want your teen to fall in love with a school they can’t afford,” says Stack, who points out that the number of students defaulting on their loans within two years after graduation is now 9.1%. (One reason: It’s becoming harder for current graduates to find jobs.) But you don’t necessarily have to rule out all private schools, which may have more money to offer than state ones, says Weingold. “Some colleges have generous aid-giving policies, so you never know what you’ll get until you apply,” he says. To estimate how much tuition and living expenses will come to — and to get an idea of how much assistance your family may receive — visit each college’s website and look for the “net price calculator”; all U.S. schools are now required to post one.

Barter for a better financial aid package. You don’t have to accept a college’s first offer, says Weingold. Call the school’s financial aid office and explain why your family still can’t afford the expenses. If your teen has received a better package from another university, write an appeal letter, including the offer, to her first-choice school, which may match it.

Cap your borrowing. Ideally, your child’s student debt shouldn’t be higher than their yearly starting salary, says Stack. The average income for college graduates is about $42,000 and varies depending on career; visit naceweb.org to see a range of salaries. Another strategy: Keep debt below $31,000, which is the maximum you can borrow over a four-year-period through federal Stafford loans. Unlike private loans, government ones have fixed interest rates and more safety nets, plus they offer some income-based repayment plans and loan forgiveness.

Here at First Financial, we provide a cuScholar Private Student Loan for undergraduate students and cuGrad Private Student Loan Consolidation for college graduates. If you are interested in one of our loans, you can refer back to one of our previous blog posts for additional information about our student loans. If you have any questions, you can contact us at 866.750.0100 or feel free to stop into any one of our branches.

Be sure to attend our FREE Financial Aid Seminar and Pizza Night next Wednesday at 6:30pm at our Wall Office located at 1800 Route 34 North, Building 3, Suite 302. The seminar will be presented by Ken O’Connor, an 11 year veteran of higher-education finance, having served thousands of students and parents during his career as a financial aid counselor. Having assisted so many families, each having their own specific financial and educational needs, Ken has gained experience in creatively solving a multitude of the financial problems that arise with attending college. We hope to see you there!

*Click here to view the article source. 

Private student loans should be used as supplemental funding after exhausting all other sources of financial aid, including grants, scholarships, and federal student loans. Federal loans offer more attractive terms when compared to most other borrowing options, including private student loans. For more information on federal loans, visit FAFSA’s website.

The cuGrad Private Student Loan Consolidation is available to borrowers who are carrying private student loan debt. Federal student loans cannot be consolidated with the cuGrad Private Student Loan Consolidation. If you are seeking a federal student loan consolidation, you can learn more details about the process here:http://www.loanconsolidation.ed.gov/  

Manage Student Loan Debt After Graduation

Save Time and Money Refinancing with Student Loan Consolidation from First Financial!

diplomaCould you use some extra spending money to cover expenses other than student loan payments? First Financial is here to help. For college graduates overwhelmed by multiple monthly payments, high rates and short repayment terms, the cuGrad Private Student Loan Consolidation available through LendKey could mean thousands of dollars in potential savings. Depending on your financial situation and career goals, Private Student Loan Consolidation can facilitate cash-flow management or long-term debt elimination.

Do you know the difference between student loan consolidation and refinancing? Check out LendKey’s new video, which explains the differences in a funny and creative way – to help you figure out which might be the best option for you.

cuGrad Private Student Loan Consolidation Benefits:

  • Simplify Your Finances with one easy monthly payment.
  • Lower Payment and Competitive Rate possible with extended repayment term
  • Cosigner Release Available for credit worthy borrowers after 12 consecutive on-time principal + interest payments
  • Interest-Only Repayment Option available for first 4 years followed by 11 years of principal + interest repayment

Apply online today at www.custudentloans.org/firstffcu!

The cuGrad Private Student Loan Consolidation is available to borrowers who are carrying private student loan debt. Federal student loans cannot be consolidated with the cuGrad Private Student Loan Consolidation. If you are seeking a federal student loan consolidation, you can learn more details about the process here: http://www.loanconsolidation.ed.gov/.

What’s Your Number? 5 Financial Figures You Need to Know

When we talk about personal finance, a lot of terms often get tossed around: APRs, credit scores, mortgage principles … you get the idea. It’s easy to get lost in all of these numbers, so we’re here to break it down for you. These five may be the most important – they’re the difference between a healthy bank account and debt collectors knocking at your door. Expenses.

1. Your credit score. This may be the most important number ever attached to your name. Your credit score decides your approval for a mortgage or auto loan; it also plays a role in what credit card offers you qualify for. It influences your rates on loans too, and much more. Moreover, many employers evaluate an applicant’s score during the hiring process.

To build a high score, you have to be a responsible borrower. That job is a little more complex than it might sound, so we’ll start at the beginning: Pay your credit card bills on time and in full.

Once you’ve got that down, another way to boost your credit score is to take out different types of loans to show you’re creditworthy.

That said, don’t take out all those loans at the same time, as each results in a hard inquiry, which takes a slight hit on your credit score. Your length of credit history has an impact on your score, and too many accounts opened at the same time may not look too good.

Does your credit score need some work?  Have no fear, check out First Financial’s low cost First Score program.  First Score is an interactive session with a financial expert, which simulates your credit score with various scenarios.  We’ll show you how to get your credit score back on track!

2. Your tax rate. When you file your taxes, you’ll find yourself in one of six brackets, from 10 to 35 percent. Don’t assume, though, that if you fall into the 15 percent bracket, you pay a flat 15 percent to the federal government every year — you’ll pay less.

That’s because the 15 percent bracket isn’t your effective rate (the final amount you end up paying); it’s your marginal tax rate, which says how much your last dollar is taxed.

Confused? Think of taxes as a stepladder: for single people, the 10 percent bracket ends at $8,700. The next rung on the ladder is the 15 percent bracket, from $8,701 to $35,350.

If you made $30,000 last year, the first $8,700 you made is taxed 10 percent; and the rest, that other $21,300 you earned, is taxed 15 percent. In sum, you end up paying $4,065, which means, again, your effective rate isn’t 15 percent but rather 13.55 percent, assuming you don’t claim any tax deductions, credits, or the like.

Here’s why this is important: If your employer withholds significantly more than you owe to the federal government, you might ask them to withhold a little less. That way, rather than get the extra cash back as a federal tax return in springtime, you can deposit the money into a savings account or save it for retirement by depositing it into an Individual Retirement Account (IRA), which are both Federally Insured by the NCUA.

3. Your personal savings rate. In America, saving a large portion of your earnings may be a thing of the past. The personal saving rate — how much of your disposable income is socked away rather than spent — is at just 4.6 percent as of the fourth quarter of 2012.

While this is much improved from a shocking low of 1.5 percent in 2005, it still represents a major decline from decades past, when Americans overall saved more than 10 percent of their income. What’s worse, in 2010, according to the Federal Reserve, just 52 percent of Americans spent less than they earned.

If you’re looking to save, check out your local credit union like First Financial! We offer a great variety of options in savings accounts and savings certificates, which are Federally Insured by the NCUA.

4. Your student loan debt. Americans hold more debt in student loans than in credit cards, to the tune of $1 trillion. Although rates on most federal and private loans are less than those for credit cards, the sheer amount of debt — sometimes as much as $100,000 or more — can make it difficult to afford even the minimum payments. Be sure to know your future obligations when taking out student loans, and take advantage of any beneficial repayment programs offered by your lenders.

You need to get a handle on your student debt, as it will affect the loans you take out in the future. The way you treat your student debt, and really any debt, has a bearing on your credit score, which in turn has a bearing on your future rates — or if you’ll be approved for a loan at all.

If you have student loan debt and need to consolidate your student loans, be sure to check out our Student Loan Consolidation program.  You can apply right online, quickly and easily!*

business finance5. Your net worth. It sounds daunting to try to put a dollar value to your name, but knowing this value will help you set smarter goals and create a sound financial plan. To calculate your net worth, you need to make a list of everything you own, everything you owe, and then subtract to find out the difference.

First, add up your assets, then your liabilities (or your total debts). Your rough net assets equation should be as follows:

Net worth = (cash + properties + investments) – (credit card debt + loans + outstanding payments of any other kind).

If you’re in the positive, ask yourself: “Am I allocating my resources as best I can to my short, medium, and long-term goals?” If all of your money is sitting in a low-yield savings account, consider investing a portion of it to diversify your portfolio. The Investment & Retirement Center located at First Financial, can help you do just that.**

If you’re in the negative, don’t stress – but rather develop a plan. The most important step you can take is to begin paying off your debt as soon as possible, starting with the loans that have the highest rates.

Once you know where you stand overall, you can budget better for future expenses, such as preparing to buy a car or saving for retirement.

*The cuGrad Private Student Loan Consolidation is available to borrowers who are carrying private student loan debt. Federal student loans cannot be consolidated with the cuGrad Private Student Loan Consolidation. If you are seeking a federal student loan consolidation, you can learn more details about the process here: http://www.loanconsolidation.ed.gov/

**Representatives are registered, securities are sold, and investment advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC , a registered broker/dealer and investment advisor, 2000 Heritage Way, Waverly, Iowa 50677, toll-free 800-369-2862. Nondeposit investment and insurance products are not federally insured, involve investment risk, may lose value and are not obligations of or guaranteed by the financial institution. CBSI is under contract with the financial institution, through the financial services program, to make securities available to members.

Article Source: http://money.usnews.com/money/blogs/my-money/2013/03/18/whats-your-number-5-financial-figures-you-need-to-know