According to a 2012 Sallie Mae report, “How America Pays,” 35% of students borrowed education loans to pay for college and, although credit card ownership has decreased recently, 35% of undergraduates have a credit card. Credit is an important financial tool that students need to learn how to manage wisely. Learn how credit card debt can affect you now as well as in the future through this webinar.
Student loans are a common and convenient source of funding used by more than half of the students at the University of Illinois to help pay for their education. Many students do need to borrow and consider this a wise investment in their future. Before borrowing a student loan, consider this important information:
Borrow only what you need and can reasonably repay.
Develop a realistic budget and consider ways to lower your costs.
Research the average pay of your chosen field to know if your projected earnings will be enough to repay your student loans.
Keep track of your loan debt (principal and any accrued interest) so you will know the amount you will have to repay.
Know that repaying your student loan on time can help establish and maintain an excellent credit history.
Be aware that student loans are in your name and affect your credit history, so you should know and understand the obligations.
Unlike other forms of consumer debt, student loans cannot be discharged through bankruptcy except under extraordinary circumstances.
If you fail to make a payment on your student loan for an extended period, your loans may be placed into default.
A default on a federal student loan will require payment of additional costs, including collection costs, attorney’s fees, court costs, and additional interest. These costs may substantially increase the amount owed on your student loan.
No statutes of limitation apply to the collection of federal student loan debt. This means that your student loan debt may be collected many years, or decades, into the future.
The IRS may seize your tax refunds to repay a defaulted federal student loan.
Your future wages may be garnished to repay a defaulted federal student loan.
Your Social Security benefits may be garnished to repay a defaulted federal student loan.
Any disability benefits you receive may be garnished to repay a defaulted federal student loan.
A default on a federal student loan may result in the denial or revocation of a professional license, such as a license to practice medicine or law.
Undergraduate and graduate students that borrow Federal Direct Student Loans (subsidized and/or unsubsidized) need to be aware there are maximum allowable loan limits. There is an annual maximum loan limit which restricts the total amount a student can borrow for an academic year (fall, spring, and summer). Also, there are aggregate maximum loan limits which restrict the amount a student can borrow over their college career.
Are you easily overwhelmed by numbers and interest rate calculations? Do you tend to avoid careful planning and decision-making when it comes to your personal finances because you simply have trouble understanding these calculations? If yes, then this is the guide for you!
Understanding the Mathematics of Personal Finance is a highly useful resource for the day-to-day management of personal finances. Even before introducing any of the contexts in which math is used in personal finance, the resource has a primer on the mathematics that serves as the basis for personal finance calculations.
At its root, this book is all about loan calculations, but the author, Lawrence N. Dworsky, has a broader definition of a loan. A loan is not just when an individual borrows money from a bank. A loan can also be an investment, but in that case another party is borrowing money from the individual. So this resource is useful not only for borrowing but also for investing.
Understanding the Mathematics of Personal Finance will equip you with the basic math skills for personal finance that you need to make informed decisions before you borrow money and as you pay it back. Dworsky is clear that this resource does not contain strategies for borrowing or investing. Instead, it gives you the ability to decide for yourself what decisions would be best, solely on the basis of numbers.
Note: This ebook can only be accessed on campus or off campus with your University of Illinois at Urbana-Champaign NetID. If you do not have access to this ebook, please request a print copy through your local public library.
So, you’ve gotten declined for a credit card…Now what?
Each time you apply for credit, whether it is a credit card or a loan, it is called a “hard inquiry.” This stays on your credit report for two years. While getting declined credit will not negatively impact your credit score or history, a bank or lender will look at the number of “hard inquiries” you have; the more you have, the riskier you are. However, it is important to note that if you are looking for specific types of credit, like an auto loan or a mortgage, multiple inquiries will count as only one for credit scores.
It’s also important to understand why you were declined in the first place. Reasons can include: having too low of an income, owning too many credit cards, a record of late payments, being in collections, or having limited credit history. If you are denied credit, a lender is required to tell you why within 60 days of your application being rejected according to the Equal Credit Opportunity Act (ECOA).