Financial Aid Terms
FAFSA? Master Promissory Note? Subsidized vs. unsubsidized loans? If you’re lost already, you’ve come to the right place. Consider this brief lesson a prelude to all the studying you’ll have to do in college, and keep this as your handy cheat-sheet.
FAFSA ~ Free Application for Federal Student Aid. It’s a standard application used to determine eligibility for the majority of financial aid, including federal loans. You’ll have to fill out a new one each year that you apply for aid, even if you stay at the same school.
Alternative loan ~ Also called a Private Student Loan. Credit-based, financed through a financial lender with payments deferred until you finish school.
Award letter ~ Official document from secondary education’s financial aid office that informs you of all the financial aid being offered to you.
Consolidation ~ The process of combining all outstanding student loans into one, often with extended repayment terms. This loan is only available for those individuals who have completed school.
Dependent student ~ Any student who depends financially on his or her parents’ income and assets. Considered heavily in awarding financial aid to particular individuals.
Independent student ~ To be classified as independent, an individual must meet any one of the following criteria:
Gift aid ~ Aid that students are not required to pay back, like grants and scholarships.
Lender code ~ Each financial institution has its own lender code used to indicate they are the ones funding your aid.
Master Promissory Note ~ A legally binding contract that includes all terms and conditions under which a borrower promises to repay a loan.
Subsidized loan ~ A federal loan in which the government pays the accruing interest while the student attends school at least half-time, as well as during the grace period and deferment times.
Unsubsidized loan ~ A federal loan not based on need. The borrower is responsible for paying the accrued interest at all times.
Buying a Car for the First Time
Picture this: You’re 22, just out of college, starting a new job, and now you need a car. Being an independent college grad means buying a car on your own, right? Right. Except when you get to the car dealership you’re told that you’ve been denied for a car loan because you don’t have any credit. “No credit? How am I supposed to get by in the real world with no credit?” That’s where we come in.
“THANKS CREDIT UNION!”
“YOU’RE WELCOME MEMBER!”
We realize how difficult, frustrating, and bewildering the car buying process can be – especially when no one seems to want to take the chance on giving you a loan. Inspire Federal Credit Union wants to give you the chance you deserve.
With our First Time Car Buyer Program you can borrow up to $20,000 at a very competitive rate. But there’s more…
Plus, as an added bonus, we’ll give you a $50 WaWa Gas Card when you sign for the loan!
So check out Inspire FCU and see how they can help you get a new set of wheels!
There has been a lot of talk this year about the government trying to tax Credit Unions. As most of you know Credit Unions are tax exempt but some of you might not know why. John H. Murga (Chief Executive Officer of Hidden River Credit Union) wrote a great letter in response to someone who thinks Credit Unions should be taxed. He explains why Credit Union tax exemption exists.
“Credit unions are structured differently in that they are democratically controlled not-for-profit financial institutions. By opening an account and depositing funds you become a member with equal share in the credit union. That’s why you’re called a member. You own it and have a voice in how things are run, no matter how much you have on deposit. There are no customers and certainly no stockholders”
“The character structure of credit unions requires them to exclusively serve a defined field of membership that is approved and enforced by federal or state regulators. The field of membership may be occupational, geographic or associational, for example. Banks have no such restrictions. While it is true fields of membership have broadened in recent years, and only with regulatory approval, the reason is quite simple – people and the market demand it.”
“One more important point to remember: It was during the banking crisis of 2008 that banks, as an industry, asked Congress for taxpayer-funded bailouts – not credit unions. As a movement, we paid for any credit union losses from within the system and from amongst our fellow credit unions with not one cent of taxpayer funds. Banks believed then it was the taxpayers’ turn to pay their “fair share.”
If you read the news a lot you might have heard of this new form of digital currency Bitcoin. According to wikipedia it is a cryptocurrency, so-called because it uses cryptography to control the creation and transfer of money. What does that mean….I am not entirely sure. But here is a great video and article that can help explain it a little better.
Do you use bitcoin? Do you trust it? Let us know!
Its tax season and right now the IRS is holding onto $760 million in unclaimed tax refunds. What will happen to that money if it goes unclaimed? Someone will get it. And that someone is Sam…you may know him…he is your UNCLE!
“GIVE ME YOUR MONEY!”- Beloved American Icon
Don’t let Uncle Sam take your money! If you are one of the 918,600 taxpayers who still haven’t filed their 2010 tax returns do it now or the government keeps it! If you are a credit union member you can even save $15 on Turbo Tax! Go here now to see how.
If you’re a teenager, setting up a budget probably isn’t at the top of your to-do list. But learning how to set up and follow a budget now could have a dramatic impact on your chances of reaching financial success as an adult. For help getting started on your budgeting goals, simply read the tips below!
Step One: Calculate your monthly costs.
Before you can set up a sensible, realistic budget, you must first determine how much money you typically spend on a monthly basis. The best way to figure this out is to write down all of your expenses and purchases for one month, and then add up the total.
Step Two: Determine your average monthly income.
Though most teens don’t have a consistent source of income, it’s usually possible to get at least some sense of how much money you make in a given month. Simply jot down any allowance you receive or income you earn for one month, and then—just as you did in step one—add everything up to figure out your average monthly income.
Step Three: Analyze your saving and spending habits.
The next step in creating a successful budget is to review your average monthly costs and income. First, take a moment to ensure your income exceeds your expenses. If not, you should immediately try to figure out ways you can cut back on spending or increase your income. (Step four may help you determine if there are certain types of expenses for which you can reduce your spending.)
Step Four: Separate your expense categories.
Typical budget expense categories include housing, food, transportation, entertainment, clothing, etc. As a teen, you’ll likely find that not all of these expense categories apply to you, but a quick glance at the monthly expense sheet you created in step one should help you figure out the categories needed for your specific situation.
Step Five: Allocate your funds.
For each expense category you noted in step four, determine the maximum amount of money you can spend in that category per month. Of course, you’ll want to make sure the total amount doesn’t exceed your income! And don’t forget to also set aside in your budget an amount you plan to save each month. At a minimum, you should try to save at least 10% of the money you earn.
Step Six: Track your progress.
At the end of each week, review your expenses and determine if you’re staying on track with your budget. For instance, if you’ve already spent 75% of the money allotted to your entertainment category by the end of the first week, you’ll know you need to be wary of any additional entertainment expenses so you don’t exceed your budget goals for the month. Also, as you become older—and your income and expenses increase—you’ll want to keep checking and revising your budget to ensure it continues to meet your needs.
It’s true that setting up a budget can take some time, but the rewards of good financial management will one day pay off in a big way!