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    Financial Tools for College

    Do you have a son or daughter leaving home for college this fall? Along with the requisite cell phone, CD/DVD player and wardrobe, are they prepared for the money needs they will now be challenged with? Do they have the financial tools in their backpacks as they head off to one of more than 4,100 colleges and universities in the United States? Here are some important facts to consider when assisting your student in making good financial decisions as they head off to college:

    * As reported in the 2003 Almanac of The Chronicle of Higher Education, more than 12.6 million undergraduate students were enrolled in college -- thatís one out of 20 people in the United States. So parents, youíre not alone in making some tough financial decisions.

    * During the 2003 to 2004 academic year, The College Board reports the estimated average annual cost of attendance as being $29,541 at a four-year private college, $13,833 at a four-year public college and $10,981 at a two-year college. As the saying goes, paying for college is like buying a car every year -- the decision is whether itís new or used.

    * Student loans are critical for todayís college and university students. The American Council on Education reported in its 2003 Survey Findings that two-thirds of students or their family members currently depend on these loans to pay college expenses.

    * Teen Research Unlimited states that teens spent $175 billion in 2003. When they leave for college, making good financial choices becomes even more important.

    As noted by these statistics, paying for their education and managing spending are critical to your studentís success in school.

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    Student Loans -- Covering the Big Costs

    Student loans are some of the most commonly used financial tools. Student loans are funds borrowed from a financial institution or federal or state government. Education loans must be repaid. There are at least three types of education loans:

    Federal Perkins Loan is a federal loan program administered by colleges. Itís available to both undergraduate and graduate students and is based on need and the availability of government funds. The annual interest rate is 5 percent. Repayment begins nine months after the student leaves school or is less than a half-time student.

    Federal Stafford (student) Loans and Federal PLUS (parent) Loans are available through financial institutions such as U.S. Bank that participate in the FFEL program or through the federal government in the direct loan program. Currently rates are as low as 2.77 percent for Stafford loans and 4.17 percent for PLUS loans, with maximum annual interest rates of 8.25 percent and 9 percent respectively.

    Financial institution (or ďsupplementalĒ) loans are for students (or their parents) who attend participating colleges and graduate schools. They are not based on need. This type of loan can be used as a supplement or replacement for Federal loans. U.S. Bank offers a number of supplemental loans where students can borrow up to the entire annual cost of attendance, minus other financial aid received, at competitive interest rates.

    Information on the U.S. Bankís student loans can be found on the web at usbank.com or by phone at (800) 242-1200. One more thing -- even if you think you wonít qualify for college financial aid, try anyway. You might be pleasantly surprised and receive financial aid.

    Checking Accounts -- Paying Everyday Bills

    Moving in. Finding the dining hall. The first week of classes. Students have enough to worry about without having to worry about their finances. Thatís why itís important for students to set up a checking account as soon as they arrive on campus.

    A checking account, combined with a check card, is the most convenient way for a student to manage finances at school. Managing money on a daily basis is convenient and easy with a checking account. Not only can students pay bills, they can have student loan payments deposited directly into their account, and they can make everyday purchases -- like books at the campus bookstore -- with a Visa Check Card. When students learn to manage finances with a checking account, it offers a valuable education that will serve students well in college and beyond.

    There are important features to consider when choosing a student checking account:

    1. Does the bank offer a student checking account? Typically, banks that have a student checking account offer special features that meet the unique financial needs of a student.

    2. Does the checking account have no minimum balance and no monthly service fee?

    3. Does the checking account provide free Internet banking, free internet bill pay and free online statements?

    4. Does the checking account offer the student their first box of checks for free?

    5. Does the checking account provide free ATM transactions at foreign ATMs (ATM machines outside of the studentís bank network) to help students while travelling abroad, home for the holidays or for spring break?

    6. Does the account offer special rewards, just for using their check card?

    7. Does the bank have a strong branch office network? Many students feel more comfortable with one-on-one customer service to answer questions or to talk about banking options after they graduate. Choose a bank that has branch office coverage in the state in which you live as well as the state in which the college is located.

    8. Does the bank offer 24-hour customer service, 365 days a year?

    For more information, visit usbank.com/studentbanking.

    Plastic Cards Ė Controlling Spending

    College students need money for many things in their busy lives -- books, gas, clothes, travel and emergencies. A reloadable, prepaid card is the perfect tool. For example, the prepaid Visa Buxx card has benefits for both students and parents. It's safer than cash, plus there's no risk of debt because students can only access the funds preloaded to the card. Also it is a great tool to help students develop positive financial skills they'll use throughout their life. Parents load the card, track purchases and balance information online and can even set up an automatic allowance schedule. Your student can use the card everywhere Visa debit cards are accepted, including online and at the ATM. The U.S. Bank Visa Buxx Card is available at any U.S. Bank branch or online at usbank.com/buxxcard1.

    Shopping for everyday needs will probably be a new experience for college students. Finding a conservative, low-cost credit card may now prove to be a necessity. Watch out for low introductory rates that often increase soon after the cards are used. Instead find cards with reasonable interest rates and low maximum balances and spending limits. Even more helpful, encourage your student to pay off their balance monthly, and incur no interest charges. Newer cards now allow students to earn rewards for all purchases. The U.S. Bank College Rewards Visa Card allows students to manage their own finances, while earning points towards free entertainment and merchandise -- as they can earn one point for every net purchase dollar charged -- with points good for CDs, media rentals, movie tickets, electronics, restaurant certificates and much more. Online access is also important in order to view account balances, and manage and redeem reward points. For more information, check out usbank.com/collegevisa.

    Given studentsí unique needs while in college, it is critical to assist them in making good financial decisions before they set foot on campus.

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    Courtesy of ARA Content

    #2
    This is really helpful blog. College students are major targets of banks and credit card companies. Most probably student have to face such financial crisis for financing their education so they prefer some kind of education loans which is the best financial tool of banks and loan providers.

    Comment


      #3
      Originally posted by jeffrey View Post
      * During the 2003 to 2004 academic year, The College Board reports the estimated average annual cost of attendance as being $29,541 at a four-year private college, $13,833 at a four-year public college and $10,981 at a two-year college.
      These numbers are even higher now. A 4 year private college will run you $45-$55,000. Our top four-year public college is between $25,000-$33,000.

      Comment


        #4
        Originally posted by moneybags View Post
        These numbers are even higher now. A 4 year private college will run you $45-$55,000. Our top four-year public college is between $25,000-$33,000.
        Right, and it increases dramatically each year!

        Comment


          #5
          Originally posted by moneybags View Post
          These numbers are even higher now. A 4 year private college will run you $45-$55,000. Our top four-year public college is between $25,000-$33,000.
          My eyes are bigger like eggs. I don't have credit card so I can save my money to not spend it easily & quickly.

          No credit card so you can buy expensive goods later...

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