Money Management Skills



Lecture 6: Investing in Education

SURYLGHGE\WKHPD\EHVRPHZKDWRIIVHWE\WKHUHGXFHGVWXGHQW

DLGDYDLODELOLW\

% 7KHUHDUHWZREDVLFW\SHVRIIHGHUDOVWXGHQWORDQV:LWKVXEVLGL]HG

loans, the government pays all of the interest expenses while the

VWXGHQWLVVWLOOLQVFKRRO:KHQWKHVWXGHQWJUDGXDWHVLQWHUHVWVWDUWV

7KHJRYHUQPHQWDOVRSURYLGHVXQVXEVLGL]HGVWXGHQWORDQVGXULQJ

VFKRROWKHLQWHUHVWDFFXPXODWHVRQWKHORDQEDODQFH

% Rates of interest are slightly lower for undergraduate debt and

KLJKHUIRUJUDGXDWHHGXFDWLRQ<RXUHOLJLELOLW\IRUVXEVLGL]HGORDQV

LVGHWHUPLQHGE\WKH)$)6$DQGLQJHQHUDORQO\VWXGHQWVIURP

ORZHULQFRPHKRXVHKROGVDUHHOLJLEOHIRUVXEVLGL]HGORDQV

% Federal unsubsidized student loans are smallish loans, ranging

IURPDERXWWRGROODUVSHU\HDUGHSHQGLQJRQZKHWKHU

\RX¶UHDGHSHQGHQWRUDQLQGHSHQGHQWVWXGHQW\RXU¿UVW\HDU7KHVH

amounts increase by a few thousand dollars for students in later

\HDUV RI WKHLU HGXFDWLRQ$JJUHJDWH ORDQ OLPLWV DUH D OLWWOH RYHU

GROODUV

% *RYHUQPHQWORDQVKDYHPRUHÀH[LELOLW\WKDQSULYDWHVWXGHQWORDQV

LQWHUPVRIUHSD\PHQW7KHVWDQGDUGWHUPLV\HDUVDQG\RXZLOO

SD\D¿[HGDPRXQWHDFKPRQWKEDVHGRQWKHLQWHUHVWUDWHZKHQ\RX

ERUURZWKHPRQH\

% ([WHQGHGUHSD\PHQWSODQVDOORZ\RXWRVWUHWFKWKHWHUPRXWWR

\HDUVLI\RXKDYHPRUHWKDQGROODUVLQFRQVROLGDWHGSXEOLF

ORDQGHEW7KHUHDUHDOVRJUDGXDWHGSD\PHQWORDQVWKDWVWDUWDWD

lower amount and increase every two years for students whose

LQFRPHZLOOOLNHO\FOLPERYHUWLPH,QFRPHFRQWLQJHQWORDQVZLOO

let you pay no more than 20 percent of your monthly discretionary

LQFRPH<RXFDQHYHQVZLWFKEHWZHHQWKHVHSODQV

% 3D\PHQWVFDQEHGHIHUUHGLI\RXH[SHULHQFHD¿QDQFLDOKDUGVKLS

<RXPLJKWHYHQEHDEOHWRJHWORDQIRUJLYHQHVVLI\RXZRUNDWD

JRYHUQPHQW RU QRQSUR¿W MRE DQG PDNH SD\PHQWV RQ D VWXGHQW