Finances After College | How to College | Crash Course #Finance

when you began college you likely had the option of financial aid this aid might have been needs based it might have been grants it might have been Loans hopefully whatever kind of aid you got involved in intake interview or counseling sessions so you could understand all

of the terms and agreements but sometimes it doesn’t happen and even if it did that was a couple of years ago but let’s not doubt ourselves we’re smart we’re getting a college degree some of us can even interpret hamlet’s soliloquies and if we can handle shakespearean

pros we can handle modern Finance jargon like forbearance and consolidation student Loans can feel like a lot to deal with but they don’t have to be

incomprehensible we just need a little study session hi i’m erica brazovsky and this is crash course how to college a study hall series presented a partnership with arizona state university today we’re going to talk about how to pay back our student Loans okay time to

study some vocab everyone’s situation is different but by the end of this episode you’ll have a cheat sheet or study guide for paying back your student Loans and like any other technical class with a lot of specialized language you might find it useful to take some

notes so this would be a good place to pause and grab your favorite note-taking technology the first thing to remember is to always ask questions remember that just like in the classroom there are no stupid questions we took out the Loans so we should understand them and one of the

first places we can take our questions will typically be our college’s financial aid office they can tell us how much we owe and who we owe it to in fact before we graduate our school is obligated to offer us exit counseling which lets us learn about our student Debt and ask

any questions we might have it’s typically an online tutorial students complete on their own so it’s important that if you have any questions you talk to an actual person in the financial aid office before you graduate exit counseling can also help us understand some basics like the

amount we borrowed when we first took out the Loan is called the principal and all Loans also have an interest rate which is like the cost we paid to whoever Loaned us money as great as it would be they did not do it out of the goodness of their

hearts when we pay back our Loans we’ll have paid off both the principal and the accrued interest now there are a couple of different kinds of federal Loans that may have been offered to you when you enrolled in college if you’re a new or recently

graduated student you may have had access to direct subsidized Loans direct unsubsidized Loans also known as stafford Loans or direct plus Loans a direct subsidized Loan is available to any undergraduate student

with financial need we talked more about financial aid in episode five but the important thing to know here is that if you are offered a subsidized federal Loan the government will pay the interest as long as you’re in school at least part time for the first six months after

you leave school also known as a grace period as well as during any deferment periods which is when your Loan payments have been postponed a direct unsubsidized Loan on the other hand is available to any student who wants one this is not a needs-based

Loan although how much you can borrow is determined by your school what year you’re in and other factors you as the borrower are responsible for paying all of the interest on this Loan and the interest starts accruing immediately there are also direct plus

Loans these are made to either the parents of undergraduates or graduate or professional students eligibility here is based on a Credit check if you’re an undergraduate who’s dependent on your parents and they can’t receive plus

Loans you may be eligible for more direct unsubsidized Loans the same is true if you’re an independent undergraduate student if you’re not dependent on your parents you won’t have access to direct plus Loans but you may be

eligible for a higher amount of a direct unsubsidized Loan for you returning students who have done college before you might be thinking okay i remember stafford Loans where are the perkins Loans i’m sorry to be the bearer of bad news but the

last perkins Loan was distributed in 2018 and the program no longer exists likewise federal family education Loans haven’t been around in a while probably the most important thing to understand about making your federal student Loan payments

is that although you’re borrowing money from the government a third-party Loan servicer has been hired to manage billing invoicing payment tracking and more to find out who your servicer is you can visit the studentaid.gov website and it’s important to keep track of

what you owe even when you’re in school because those Loan payments are on the horizon even if it doesn’t feel like it that six month grace period after you graduate where you don’t have to start paying your Loans well it goes by fast paying back

Loans has a significant effect on your Credit score each person has one and it tells banks and other lenders how likely it is that you’ll pay back a Loan on time you can check yours with a third-party service or through a bank that you use a

good Credit score can help us get other Loans buy a house or rent an apartment your score goes up when you reduce your Debt and make timely payments of course sometimes life happens and this isn’t possible in these cases it’s possible

to put Loans on forbearance or delay making payments it’s also possible to defer payments and other circumstances as well for example if you go to graduate school you can defer until you’re finished earning your next degree just be aware that if you do that your

interest may still accrue this is one reason why it’s never too early to start making payments you can chip away at your Loans when they’re on forbearance or even when you’re still in school it’s sort of like washing a couple dishes when you have some extra

down time paying down a hundred dollars when you have extra is a great habit because over time it adds up if we don’t make payments and time we eventually have to default meaning we failed to pay back the Loan this is terrible for our Credit and can cause

major problems in other areas of life like renting an apartment or financing a vehicle so deferring Loans impossible and chipping away them is the best option let’s go to the thought bubble casey graduated from crash course state college six months ago she’s been

getting reminder letters from a Loan servicer that her Loans are about to come out of deferment and she’ll need to start making monthly payments to make sure she doesn’t fall behind casey can make a budget to manage all of her financial commitments she

needs to factor in her Loan payments along with medical expenses rent payments and necessities like food and transportation after looking at the suggested repayment plans casey’s still a little confused about how much she owes and when if you’re unclear about your own

monthly Loan obligations you can use a Loan simulator website to give you a sense of what you’ll owe and when budgets and tools like this can help you picture for the future exactly what you need when you’re making long-term plans there are also

Loan forgiveness programs there are several ways to qualify but some of the most common ways Loans can be forgiven include working for the government or a non-Profit for a specific period of time teaching at a low Income school and

becoming permanently disabled contact your Loan service if you think you might qualify or look at the detailed information available at studentaid.gov thanks thoughtbubble paying off student Loans is a long term commitment and in that time a lot will happen we may

change jobs or even our whole careers we may find that we have new obligations that we didn’t expect life is full of surprises that’s why it’s important to zoom out from our monthly payments and consider ways to change the larger process of how we’re paying back our

Loans making payments should feel more like a marathon than a sprint so it seems like we have to cover a lot of distance in a short amount of time it may be time to assess our options the standard repayment plan calculates your repayment schedule over 10 years this could be far too

financially stressful for some of us so other Income driven repayment plans may be more appropriate it’s possible to switch to a graduated repayment plan which gives us lower monthly payments now but increases over time there are also extended repayment plans which lower our

monthly payments by increasing the length of time it will be paying back the Loan here there’s no sudden increase in steepness but we’re running for a lot longer but figuring out how we want to repair Loans isn’t the only step we can take to

manage how much we’re paying each month there are other ways to lower monthly Loan payments as well many of us have multiple federal Loans and maybe even multiple servicers we can combine these together or consolidate our Loans in order to

simplify a repayment process and just have one monthly payment to think about in some ways it’s a little like deciding between fighting one horse-sized duck or a hundred duck-sized horses but in this case you usually choose the horse-sized duck when we consolidate Loans the

monthly payment tends to be lower and we usually get more time to pay them back plus you don’t keep track of 100 different horses it’s simpler but there are some potential downsides consolidating Loans might mean forfeiting your right to certain types of

Loan forgiveness consolidating also means that interest becomes part of the new principle so going forward we’ll be accruing interest on a higher principle than we would if we hadn’t consolidated be careful about for-Profit Loan

consolidation companies though these may result in you paying larger monthly installments or unfair Interest Rates last private Loans can’t be consolidated with federal Loans and are not tracked by any federal servicers so this option

doesn’t work for everybody so as always study up before making these decisions and rely on good advice whenever you can the important thing to remember is that there are options ask questions what we’ve covered in this episode is just a start but there are many resources and people that

can help you so if you ever feel stuck keep in mind that all of our schooling has made us excellent learners it may seem complicated but we’re capable of problem-solving and gaining knowledge about our Loans that can help us conquer them becoming a person who is able to

handle these challenges is why we went to school in the first place thanks for watching this episode of crash course how to college this series is part of an expanded program called study hall crash courses partnered with arizona state university to launch study hall on its own channel check out

youtube.com where you’ll find more tips about navigating college choosing a major plus foundational courses connected to college Credit courses that students struggle with most in their first two years we hope to see you there you