What is financial literacy?
Financial literacy is defined as:
- The ability to read, analyze, manage and communicate about the personal financial conditions affecting material well being.
- The term is used to describe financial education programs on college campuses and within high schools. The objective of financial literacy programs is to help students better manage their finances,budget effectively, and borrow wisely.
Smart financial management includes a few basic good habits. If you are a student, you may already have a checking account, a credit card, or maybe even a car loan. When heading off to college, you may also need to borrow student loans to help finance your education. But have you determined your financial goals and established good financial habits? Here are a few tips to get you started.
Steps you can take now to get on the right financial path
- Take charge of your spending. Establish a budgetPDF Document; set limits and prioritize; determine the difference between needs and wants; speak with a professional, nonprofit credit counselor if needed.
- Start saving. The earlier you save, the more you’ll have.
- Understand the costs of credit. Compare at least three offers before you choose a credit card; look for low interest rates and no annual fees; always pay more than the minimum payment.
- Understand how credit use affects your future. Know the difference between good and bad debt; check your credit report annually.
- Protect your credit and your financial future. Beware of identity theft; review statements and notify creditors immediately of errors; know what’s in your wallet/purse.
Planning for Financial Success
Minimize your student loan debt by following these Top 10 ways to graduate debt free.
- Complete the FAFSA annually.
- Qualify for federal grants.
- Research state scholarship and grant programs.
- Apply for institutional scholarships.
- Explore private scholarships.
- Inquire about work programs available on your campus.
- Set up a payment plan for your tuition.
- Secure summer employment.
- Invest in MOST, Missouri’s 529 college savings plan.
- Live like a student now, so you don’t have to later.
Scholarship Search Tips
In these tough economic times, many families may need additional money to help pay for college. Federal and state financial aid programs may not be enough. Seeking and applying for private scholarships from non-profit foundations and other organizations may provide the extra help needed. Here are some suggestions about how to find legitimate scholarships.
- “Like” the MDHE’s Facebook page, Journey to College. The MDHE is often notified when new private scholarships are available or when a scholarships’ application period opens, and this information is added immediately to Journey to College.
- Follow the MDHE’s tweets via Twitter, and have these communications sent to your cell phone. The MDHE communicates scholarship information as well as other resources for students and their families.
- Ask businesses, community groups, schools, and religious and civic organizations in your local community or state about scholarship opportunities.
- Check your local library for scholarship books.
- Keep looking! The more you search, the greater your chances of finding additional programs.
Keep the following tips in mind when using the Internet or a scholarship search organization:
- Be cautious of scholarship scams. Contact the Federal Trade Commission for more information.
- Do not provide credit card information to use a free scholarship search.
- Read the fine print carefully. Many online financial assistance search services request information about you so they can find financial assistance programs for which you may be eligible. Some of these companies may send you information about other services that they provide or sell your information to another company.
Debt Management and Minimization
Many students seek a postsecondary education hoping to improve their career opportunities and financial future. Managing your money while in school is an important part of obtaining the lifestyle you want. However, poor money management, both while in school and after, can mean a large salary going towards debt and not much else.
Follow these steps to make getting your degree, minimizing your debt and repaying your student loans as easy as possible.
For those just beginning a postsecondary program:
- Identify your expected after-graduation salary by visiting sites like www.salary.com, as well as job finding services, like www.monster.com or jobs.mo.gov, to determine the demand and compensation for your profession.
- Determine how much the degree you want will cost and if you can afford it.
- Research and compare the total costs for each postsecondary institution you are interested in, including course fees, add-on fees (student health fees, recreation fees, etc.), room and board, etc. The national College Navigator website provides comprehensive cost and program information as well as links to each schools’ net price calculator. The U.S. Department of Education also publishes College Scorecards on postsecondary institutions to help you make an informed decision about which program, degree, or college in which to invest your time and money.
- Use online calculators, such as the calculator on Mapping Your Future to determine how much student loan debt you can afford (based on your expected future salary) or what salary you will need to pay your student loan debt. A general rule of thumb is to keep student loan payments to 8% of your income.
- Develop and follow a budget while getting your degree so you can avoid credit card and other types of debt.
- Try to find sources of free funding, such as Pell Grants and scholarships, before borrowing student loans. It is also a good idea to pay for a portion of your college expenses as you go through part-time employment.
Those with a degree or about to graduate should be aware of student loan repayment options. Once you have borrowed a student loan, use the National Student Loan Data System (NSLDS) to access your student loan account and keep track of your total debt. You may also get the information by calling (800) 4-FED-AID.
8 percent rule
Most financial advisors recommend student loan payments not exceed 8% of your monthly gross income. Multiply your estimated gross income (before taxes and other withholdings) by .08. Your student loan payments should not exceed this amount.
How to Make a Payment
Making payments on your student loan with Nelnet is easy! With options to pay anytime, anywhere, you can manage your account your way. We offers a variety of payment options, including automatic debits (ACH), to let you choose a method that’s convenient for you. And, if you wish, we can send you text alerts to confirm or remind you to make your payments! See details below.
You may have more than one student loan account with Nelnet (account numbers start with D, J, or E). Within each account, your individual loans are grouped according to the characteristics they have in common. For example, loans of the same type and interest rate will be in a group together. When you make a payment, it is typically applied proportionally across the account’s groups that have an amount due. However, if all of your loans are current (not past due), you can request that your payment be applied only to specific loan groups.
We send you a monthly statement for each account about three weeks before a payment is due. Your monthly statement and online account at Nelnet.com will show your amount due and due date for that account. If you have multiple accounts, it’s possible you may have different due dates. If you make your monthly payment online, you’re able to make a single payment for all of your accounts. If you wish to mail a payment, you must send it to the address on your statement. Feel free to call us anytime to request that we align the due dates on all of your loans to a date between the 1st and 28th of each month.
This toolkit is designed to assist you in providing information on completing the FAFSA (Free Application for Federal Student Aid).
With the click of a mouse or a quick “cut and paste,” you can have your own FAFSA campaign, provided by PHEAA.
From print ads to web banners, our tools help schools and community partners increase FAFSA awareness.
How to Download: To download, right-click (control-click on Mac) and select “Save Target As…” from the pop-up menu.
State Work-Study Pays. Earn money & experience.
Pennsylvania has its own State Work-Study Program outside of Federal Work-Study. The program is open to all PA students, as long as they meet the eligibility requirements. This is an additional opportunity to earn money for school and experience for the real world.
The State Work-Study Program is a great option for Pennsylvania students:
- Take advantage of employment opportunities located in Pennsylvania.
- Choose your own employer.
- Pick a job in your future career field.
- Work up to 40 hours per week.
Determine if you are an eligible student and find an eligible job.
Know your deadlines and make sure you use the correct codes when you apply.
Use our checklist to make sure you’re prepared for your 1st day of work.
Did You Know?
The State Work-Study Program is a PHEAA-administered program made possible through funding from the General Assembly and with the cooperation of Pennsylvania postsecondary institutions and employers.
Use our online calculators to see how your financial choices can affect your bottom line.
Doing a budget for the first time can be confusing. The budget calculator on YouCanDealWithIt.com helps simplify the process.
Find out how much, and how often, you need to save to meet a specific financial goal.
Get an estimate of how your savings will grow over time.
See how different interest rates and loan terms can affect your monthly payment.
Begin the road to higher education and a brighter future now.
Whether you are a high school student deciding what you want to be or a parent figuring out how to pay for college, EducationPlanner.org is your one-stop career- and college-planning site.
If you’re an eligible Pennsylvania resident, apply for a Pennsylvania State Grant to get help with the cost of higher education.
- Explore the other aid programs available that provide funding for higher education.
Gain career-related, on-the-job work experience while earning money to help pay for your higher education.
Explore aid that helps strengthen the state’s workforce and makes higher education more affordable with the Pennsylvania Targeted Industry Program (PA-TIP).
Service to our country may qualify you or your dependents for financial aid when you pursue higher education.