What Happens If You Don’t Pay Your Student Loan Bill?

“New data shows that 11.3 percent of student loans were delinquent at the end of 2014–double the rate just 10 years ago.”

Today many students graduate with substantial student loan debt and struggle to make payments–especially when they are just entering the workforce.   While tempting to default on students loans, there are serious long-term consequences.   For example

  1. Your credit score will tank once your payment is 45-90 days late.
  2. You could wind up in default after 270 days, and the lender can ask for the unpaid balance in full and your account could be given to a collection agency.
  3. If you default on federal loan payments, Uncle Sam can take your tax return.
  4. The federal government can take up to 15 percent of your wages if you default on student loans.
  5. If someone consigned your loan, they also suffer the consequences for late payments or a default.

For someone who has fallen behind on student loan payments, the article also provides suggestions that can help get back on track.

For more information, click here

Teaching Suggestions

You may want to use the information in this blog post and the original article to

  • Stress the importance of making student loan payments on time.
  • Discuss the consequences of missing payments or defaulting on a student loan.

Discussion Questions

  1. Why is it important to make student loan payments on time?
  2. What are the consequences of defaulting on a student loan?
  3. Assume you are behind on your student loan payments. What steps can you take to find the money needed to make student loan payments and eventually pay off a student loan?

5 Questions to Help You Get Your Financial Life in Order

“Rather than making resolutions . . . try answering the following five questions today, with a plan to answer them again when 2015 comes to a close.”

In this MarketWatch article, Chuck Jaffe poses the following 5 questions to help people gauge their financial health.

  1. What’s your net worth?
  2. How many times your current (or last) salary do you have in retirement savings?
  3. What’s your debt-payment burden?
  4. If you don’t see the next New Year, what would happen to your family financially?
  5. When reviewing your finances, what is the single thing that makes you feel the best? The worst?

In addition to the questions, Mr. Jaffe also provides information that can be used to improve a person’s answers  to each question with the goal of helping people manage their personal finances and improve their financial life.

For more information, click here.

Teaching Suggestions

You may want to use the information in this blog post and the original article to

  • Discuss each question with your students and explain how their answers can impact their personal financial decision making and financial security?
  • Ask students to answer one or more of the questions in this article as an assignment.

Discussion Questions

  1. Why is your net worth, salary, savings, and debt-payment burden important?
  2. What implications does the question “If you don’t see the next New Year, what would happen to your family financially?” have on your financial planning activities?
  3. When you look at your finances, what makes you feel good and what makes you feel bad? Based on your answer, what can you do to change your answers to this question?

Can You Pass a Personal Finance Test?

Focus on Personal Finance

This quiz can be used as a lecture launcher to start your Personal Finance course.

Originally given to 5,000 high school seniors that participated in the JumpStart Coalition for Personal Financial Literacy, the 12 questions in the survey test students on their ability to manage financial resources such as

  • Credit cards
  • Insurance
  • Retirement planning and investments
  • Savings and spending options
  • Educational loans
  • Taxes

For more information go to  http://www.bankrate.com/brm/news/pf/20060421c1.asp

Teaching Suggestions

You may want to use the information in this blog post and the original article to

  • As a lecture launcher for the first day of your Personal Finance course.
  • To preview important personal finance topics that will be covered in the course.
  • Stress why everyday decisions can make a “big” difference in the quality of a person’s life over a long period of time.

Discussion Questions

  1. How many of the 12 questions did you get right? (Note:  Correct answers…

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Six Bank Fees to Avoid

Each year, it seems that banks are reporting ever higher profits.  How do they make so much money?  By charging customers service fees!

Here is a list of six fees that you should avoid:

  1. ATM Fees-It’s important to know where ATM’s are located that are in your network. This will help you avoid a charge to use another bank’s ATM.
  2. Account Fees-Check the fine print. Is there a fee if your balance falls below a certain limit? The limit fees are monthly and can really add up.
  3. Overdraft Fees-Know how much money that you have to spend. Budget wisely and make sure that you have a cushion in your checking account, in case of unexpected expenses.
  4. Fancy Checks-How cute! How much do those Frozen Personalized checks cost? The reality is that the checks and the shipping costs can be very expensive. There are numerous options to acquire cheaper checks (Sam’s club, BJ’s, Costco, Walmart).  One more thing to consider:  checks are used much less frequently today, so, that box of Frozen checks might last a really long time, make sure you like the design.
  5. Credit Reports-You can get a copy of your credit report for free from AnnualCreditReport.com, so, don’t pay for one.
  6. Loan Interest– As an incentive, banks offer a discount by utilizing more than one of their services. You might get a lower rate, if you agree to direct deposit, in exchange for a reduced interest rate on your loan.

Bottom Line: Do your homework when it comes to bank fees.  There are many ways to avoid spending money on unnecessary fees.

For more information:  http://www.wisebread.com/are-you-paying-these-6-unfair-banking-fees

Teaching points:

  • Discuss these six fees with your students. Survey how many have paid at least one of these fees.
  • Have students research at least two local banks and report back on the account fees that each bank charges.

Discussion items:

  1. Do you believe that any one demographic pays more fees than another? Why?
  2. What are some other ways that people can avoid these fees?