financial wellness & student loans
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MASSACHUSETTS EDUCATIONAL FINANCING AUTHORITY
FINANCIAL WELLNESS AND MANAGING YOUR STUDENT LOANS
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Remember, Your Education is an Investment
A college education allows you to…• Gain financial benefits over a lifetime• Experience personal growth• Be exposed to diversity• Have a lower chance of unemployment
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Begin As a Student
If you’re still a student, make smart choices now:• Minimize your debt• Live like a student, not a wealthy professional• Develop good financial habits• Stay organized and keep good financial records• Beware of ATM overuse• Avoid retail therapy• Be realistic about how much money you’ll earn after
graduation
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At College Graduation, Take Action
• Determine if you borrowed federal loans, private loans, or both
• Find out your loan servicer (you may have more than one)• Understand what you owe in full and on a monthly basis• Budget for monthly payments• Know where to send your loan payment• Don’t panic
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Create Your Post-Graduation Budget
• Identify your goals and write them down• Identify all sources of income• Identify all bills: fixed, discretionary,
and flexible• Use simple spreadsheets and/or online
budgeting tools• Distinguish between needs and wants• Keep it simple• Revise as needed
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General Loan Repayment
• Know your grace period – usually 6 months after graduation• Pay on time!• Pay off your loan with the highest interest rate first• Understand your options for repayment• Simplify the payment process – use automatic debit• Contact your loan servicer immediately if you cannot pay• Ask for help if needed
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Federal Student Loan Repayment Options
• StudentLoans.gov provides info on federal student loans• Choice of Repayment Plans– Standard – most cost effective– Graduated – useful if you expect a rise in income– Extended – Lower monthly payment and longer loan term– Pay As You Earn Plan (PAYE) – 10% of monthly income and longer loan term
• Other Options– Deferment– Forbearance– Forgiveness– Consolidation– Refinance
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Develop the Habit of Saving
• Pay yourself first• Keep an emergency fund• Use direct deposit• Utilize the power of compound interest• Take advantage of the power of time
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Importance of Good Credit
• Your credit history can determine your interest rates for purchases• Employers can check your credit before hiring you• Landlords and rental companies may check your credit• A bad credit decision stays with you for a long time
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Maintaining Good Credit
• Avoid default!• Review your credit report annually• Keep good records• Pay your bills on time• Ask for help if you need it• Understand your credit score
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Helpful Websites
mefa.org asa.org saltmoney.org studentaid.ed.gov irs.govcreditinfocenter.com bankrate.com myfico.com annualcreditreport.com creditkarma.com mint.com
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Contact Us
160 Federal Street, 4th Floor, Boston, MA 02110mefa.org | [email protected] | (800) 449-MEFA (6332)