Taking Charge! The Urgency of Educational Debt Management Self-Empowerment for Financial Well-Being Mike Matheny, M.Ed., AFC
Topics For Today • How can we turn our past experience into growth opportunities? • Regarding personal finances – What would you like to learn, and perhaps change? • A Tale of Two Costs – A Case for Accelerating Your Loan Repayment • Public Service Loan Forgiveness – Is It Even Possible? • Identify Priorities: Leveraging Credit, Risk Management, Saving and Investing • Proactive Intention – The Time Is Now • Start to Navigate the Currents of Your Life
Self-Assessment #1 Self-Assessment #2 Please take a moment to list, free-write, and/or If there is one thing you would illustrate your top personal strengths… like to change in your relationship with money… what would it be?
What prevents us from utilizing our known skill set to engage with specific objectives in pursuit of financial well-being? …Familiarity…
The Cost of Repayment 20 Year Repayment Timeline 10 Year Repayment Timeline Loan Balance: $180,000 $180,000 Loan Balance Average Interest Rate: 6.5% 6.5% Average Interest Rate Life of Loan: 20 Years 10 Years Life of Loan Monthly Payment: $1,342.03 $2,043.86 Monthly Payment: Total Cost of Loan: $322,087.59 $245,263.63 Total Cost of Loan Interest Cost: $142,087.59 $65,263.63 Interest Cost SAVE $76,824
Public Service Loan Forgiveness A Few Awful Truths Known Hazards • The Federal Loan Servicing • Poorly Timed Consolidation Landscape is NASTY • Late Payments • Significant Risk Comes with the • Overpaying Potential for Reward • Non-compliance with Annual • A Profound Lack of Institutional Documentation Requirements Accountability by the Dept. of Ed.
PSLF Cont. – Where is Reliable Support? • PSLF Help Tool from Federal Student Aid • https://studentloans.gov/myDirectLoan/pslfFlow.action#!/pslf/launch • FedLoan Servicing – Official PSLF Instruction • https://myfedloan.org/borrowers/special-programs/pslf • Administrative Paperwork – The Employer Certification Form • Additional electronic PDF document provided for you. • PSLF Booklet from the Association of American Medical Colleges • Additional electronic PDF document provided for you.
Opportunities Gained vs. Opportunities Lost What is Being Asked of You? …Engagement…
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Your Credit Report and What is “Says” About You www.annualcreditreport.com Character, Capacity and Collateral A Major Indicator of your Financial Readiness The Horse In Front of Your Cart!
Time Value of Money Working Against You with Debt Working For You with Investment
What is More Important to You? Spending ? Saving and Investing? Finance $40K for a lightly used BMW Invest in Employer’s Retirement Plan $635 monthly payment at 4.5% APR $635 monthly contribution w/ 7% ROR $45,717 = Total Paid over 6 years $56,617 = Account Balance in 6 years Blue Book Value on Payoff Date: Compounding Growth over 25 Years: Future Value (FV) = $14,624 Future Value (FV) = $287,182
Navigating Your River: What’s Around the Bend ? (find a partner for a quick discussion) As you begin your career journey as a Physician’s Assistant, what major life events are you anticipating in the next 5 years? And which have financial implications?
What Are Your Top Priorities?
My Humble Thanks to All of You … mathenym@ohsu.edu
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