Financial Aid

Student Loan Debt: The Importance of Early Financial Education

ClearPoint logo1 Student Loan Debt: The Importance of Early Financial EducationBy Thomas Bright, Marketing and Web Content Writer, ClearPoint Credit Counseling Solutions.

Today, our nation’s students are faced with an increasing number of financial decisions and are given a decreasing margin for error. Without access to the right kind of information, these students may run into very serious financial problems. As the adults in the room, the parents and educators, we are left to find a solution. An education-based solution, one that teaches financial literacy as an experience and prepares students for all the firsts they will encounter, could be the answer we have been looking for. Read more…

POSTED: April 25, 2013 | BY: admin | TAGS: , , , , , , ,

Seven Things Every College Student Should Know About Personal Finance

Christian Ackmann 218x300 Seven Things Every College Student Should Know About Personal FinanceBy Christian Ackmann, Economics concentrator at Brown University; Winner of the 2012 National Personal Finance Challenge.

You would be surprised to know the number of college students who don’t know how build their credit history, view their account balances, or even write a check.  College is usually the first time that students acquire independence, yet some students remain dependent on their parents’ financial support and advice.  Proper financial education in high school is necessary to gain financial independence in college.  During my first year of college, I have seen many financial mistakes made by my fellow students.  Here are some of the things I believe every college student should know about personal finance to make intelligent financial decisions.

1.  Credit
When I asked my fellow classmates which financial topics they wished they knew more about, the unanimous answer was credit.  For many college students, credit cards are a thing of mystery.  They are magical pieces of plastic that somehow pay for pizza and gasoline using money from their parents.  The first step to establishing a solid credit history is understanding how credit works.  Once students understand the importance of credit, it can be very helpful to have a credit card in the student’s name (not the parent’s name) to encourage responsibility.  Paying the credit card bill in full each month is an easy way to build a good credit history, not to mention the perks that many cards offer, such as cash back or air miles (which are especially applicable to college students living away from home). Read more…

POSTED: April 20, 2013 | BY: admin | TAGS: , , , , , , , , , , , , ,

Why Students Need Financial Literacy by Brian Page

Diane Ravitch, former U.S. Assistant Secretary of Education, is a historian of education, an educational policy analyst and a research professor at New York University’s Steinhardt School of Culture, Education, and Human Development. She also writes an education blog that is widely read, and sometime closely scrutinized, but the industry.

Today, her blog featured a guest post by Brian Page, award-winning educator, who demonstrates the same passion and drive for education as Ravitch does.

From Page’s post, “I want our children first introduced to complicated financial concepts and contracts by teachers who love them and who are trying to help them, not by someone trying to trick them. Relying on the school of hard knocks should not be an option anymore. It is time a step is added in the ladder to empower future generations to make wise and informed financial choices. Personal Finance should be integrated into every child’s K-12 educational experience, and a course in Personal Finance should be a semester-long high school graduation requirement.”

We couldn’t agree more. Read the full post here, and see what Ravitch has to say on her blog here.

POSTED: January 16, 2013 | BY: admin | TAGS: , , , , , , , ,

Early Education in Personal Finance Will Thwart Student Loan Crises

With each new report, statistic and news story, it is apparent today’s students are graduating college with an alarming amount of student debt.  The latest data from the Department of Education shows ninety-four percent of students who earn a bachelor’s degree are borrowing to pay for it, up from 45 percent in 1993.

This article in The New York Times features recent grads and current higher-ed students who are, surprisingly, not prepared to pay back their loans.  As 18-year-old Kelsey Griffith, who is graduating from Ohio Northern University with $120,000 in student debt, said, “I knew a private school would cost a lot of money. But when I graduate, I’m going to owe like $900 a month. No one told me that.”

As Kelsey clearly states, she had no personal finance education to explain  the real cost of college.  As higher education institutions increase marketing and recruiting tactics, students are left to their own devices to cover the bills.

Not only is personal finance education critical for our youth when it comes to their own finances, but we cannot afford to raise another generation that does not fully understand the complexities of our global economy. The recent economic downturn has brought nationwide attention to the dangers of a financially illiterate society. CEE’s 2011 Survey of the States shows that while there has clearly been progress since the first Survey in 1998, that over the last two years, the trend is slowing and in some cases moving backwards. Such ignorance comes with a high price—for all of us.

It is critically important to educate students on economics and personal finance, and if requirements are passed, schools must provide these important classes about the real world issues that students face—before it is too late.

POSTED: May 14, 2012 | BY: nan | TAGS: , , , , , ,

Know Before You Owe

The Consumer Financial Protection Bureau (CFPB) today launched the next phase of its Know Before You Owe student loan project by releasing a beta version of the Financial Aid Comparison Shopper, an interactive, online tool designed to help families plan for the costs of post-secondary education.

“Student loan debt has crossed the $1 trillion mark and tuition continues to climb,” said CFPB Director Richard Cordray. “Now more than ever, students and their families need to know before they owe. Our Financial Aid Comparison Shopper helps students make apples to apples comparisons of their offers and pick the one that works best for their financial future.”

CFPB Director Richard Cordray unveiled the tool at an event in South Dakota today with Sen. Tim Johnson, Chairman of the Senate Banking Committee.

April is the peak time when colleges send letters of acceptance. Approximately 1.5 million students will sift through 5 million letters this year. But acceptance doesn’t end the process.  Millions of American families also need to determine how to pay for school.  Unfortunately, financial aid information is often jargon-filled and unique to the institution sending it.  This can make it difficult for families to understand costs, evaluate loan options, and figure out how much debt to take on.

The CFPB kicked off the Know Before You Owe student loan project in October by working with the Department of Education on a draft Financial Aid Shopping Sheet that higher education institutions could use to present families with a uniform, easy-to-understand explanation of the total cost of post-secondary education and their options for financing it. The Financial Aid Comparison Shopper builds on that by helping students to compare the information across schools.

The beta version of the Financial Aid Comparison Shopper has more than 7,500 schools and institutions in its database, including vocational schools and community, state, and private colleges. It draws information from publicly available data provided by government statistical agencies. With the prototype, students and their families can compare the following across multiple financial aid offers:

  • Estimated monthly student loan payment after graduation;
  • Grant and scholarship offers;
  • School-specific metrics such as graduation, retention, and federal student loan default rates; and
  • Estimated debt level at graduation in relationship to the average starting salary.

The Financial Aid Comparison Shopper also includes a “Military Benefit Calculator” that can estimate education benefits for servicemembers, veterans, and their families. The calculator includes military tuition assistance and Post-9/11 GI Bill benefits.

Recently, the CFPB announced that outstanding student loan debt had crossed the $1 trillion mark.  Student loans have eclipsed credit cards as the leading source of U.S. household debt outside of mortgages. In part, this is because more students are accessing higher education. But it’s also because tuition and average debt levels have increased. Last fall, to help borrowers understand their options when tackling their federal and private student loan debt, the CFPB released the Student Debt Repayment Assistant interactive tool.

The CFPB has also been working to address the challenges faced by students who take out private student loans. Until recently, private student lenders have been regulated by a patchwork of state and federal authorities. Prior to the Dodd-Frank Wall Street Reform and Consumer Protection Act, there was no federal supervisory program that covered nonbank providers of private student loans. That authority has now been given to the CFPB. Among its reforms, the Dodd-Frank Act created a student loan ombudsman to assist borrowers and review complaints. The student loan ombudsman is also responsible for examining the complaints in order to develop recommendations to Congress and other federal government agencies.

To find out more about the CFPB’s work to help students and families make choices about college financing, visit: www.ConsumerFinance.gov.  

POSTED: April 16, 2012 | BY: admin | TAGS: , , , , ,

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