Student Services

Financial Literacy

Financial Literacy at the State College of Florida

This website offers students financial literacy resources to help them better understand student loans and personal finances so they can make educated decisions about their finances and responsibilities.

Loan management decisions have a significant impact on one's financial future. "The consequences of defaulting on a student loan are serious, and can include garnished wages, collection agency costs and many years of bad credit rating." (Bradenton Herald Oct 05, 2012) And bad credit not only makes it difficult to get future loans, it also means higher fees and higher interest rates.

Mouse Trap with $100 bills, photo by Floyd Jay WintersShop Around:

Let's say you borrow $7,500 per year for 4 years and your total student loan is $30,000. Or imagine you just made a $30,000 home improvement and took out a 10 year loan, or you just bought a nice car.

A 10 year Direct Subsidized Loan of $30,000.00 at 3.40% interest (as of Nov 2012) will have a monthly payment of $295 and $5,431 total interest over the life of the loan.

A 10 year Direct PLUS Loan of $30,000.00 at 7.90% interest (as of Nov 2012) will have a monthly payment of $362 and $13,488 total interest over the life of the loan. http://www2.ed.gov/offices/OSFAP/DirectLoan/student.html

Educate yourself! The scenario above shows that spending a few hours shopping for the best loan may save you $8,000 over the life of a small loan, and that is after taxes. And some loans rates are higher than 7.90%!
See College Loan Interest Rates: (as of Sep 1, 2012 direct.ed.gov/calc.html)

Only a 2% interest rate difference for $200,000 home loan can cost you an extra $75,000 in interest payments, in addition to providing significantly higher monthly payments. Be sure to check out the EXCEL LOAN CALCULATOR (to compare loans) and the FinAid tools provided on this site.

Click for ONLINE LOAN CALCULATOR which shows total interest and total principal (requires Java plugin).


Defaults:

The three year financial aid "cohort" default rate at SCF was 25.2% for 2009.
"The share of federal student loan defaults rose sharply last year, especially at for-profit colleges and universities." 
(Sep 12, 2011 nytimes.com/2011/09/13/education/13loans.html)


Delinquency:

"Your loan becomes delinquent the first day after you miss a payment. The delinquency will continue until all payments are made to bring your loan current. Loan servicers report all delinquencies of at least 90 days to the three major credit bureaus. A negative credit rating may make it difficult for you to borrow money to buy a car or a house (you will be charged much higher interest rates). You also may have trouble... "

  • signing up for utilities,
  • getting home owner's insurance,
  • getting a cellphone plan, or
  • getting approval to rent an apartment (credit checks usually are required for renters).

(As of Sept 2012 studentaid.ed.gov/repay-loans/default)

"A student loan debt default—no matter how old—can lead to wage garnishment," Bethy Hardeman writes for Forbes Magazine's Money Wise Women blog. "That's what 58-year-old Linda Brice learned when lawyers representing the federal government drained her bank account of several thousand dollars and garnished one-fourth of her paycheck. All because she defaulted on $3,100 in student loans borrowed more than three decades ago."
(Aug 30, 2012 nasfaa.org/Main/fa-news/blogs/3_Reasons_to_Never_Default_on_Your_Federal_Student_Loan.aspx)

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