Warm-Up 2/12/16
• If you make $8.25/hour, work an average of 25 hours per week, and lose 20% to taxes, what is your annual NET pay?
• If you are paid a salary of $40,900 and lose 20% to taxes, what is your annual NET pay?
I Can’t Afford to Go to College
Should I work for a semester or two to save up cash?
To get a loan or not… that is the question…
Age Annual NetIncome
18 4 years of college.19
20
21
22
23
24
25
26
27
TOTAL:
What if I get $4,000 in student loans each
year of college?
Estimated median household income in 2013: $49,289
http://www.city-data.com/city/Las-Vegas-Nevada.html
Salary contract.$40,900
38 weeks14 weeks unpaid
-20% taxes
$8.25/hour25/week52 weeks
-20% taxes
http://www.city-data.com/city/Las-Vegas-Nevada.html
To get a loan or not… that is the question…
Age Annual Income
18 4 years of college.
$8,580
19 $8,580
20 $8,580
21 $8,580
22 $32,720
23 $32,720
24 $32,720
25 $32,720
26 $32,720
27 $32,720
$230,640 TOTAL:
$8.25/hour25/week52 weeks
-20% taxes
Salary contract.$40,900
38 weeks14 weeks unpaid
-20% taxes
Total student loan amount = ___________
Current student loan rates: 4.29%
Pay $696.87 per month for 24 months.
Total interest = $724.78
Total Amount Repaid = _____________
Total income for these 10
years AFTER paying off
student loans.
To get a loan or not… that is the question…
Annual Net Income
18
19
20 4 years of college.
$8,580
21 $8,580
22 $8,580
23 $8,580
24 $32,720
25 $32,720
26 $32,720
27 $32,720
TOTAL:
What if I want to work so I can pay cash for college?$8.25/hour
40/week52 weeks
-20% taxes
$8.25/hour25/week52 weeks
-20% taxes
Salary contract.$40,900
38 weeks14 weeks unpaid
-20% taxes
By working full time, you will make
$____________ more every year that
can be saved for college.
This means that for these 2 years of
work, you will have saved an extra
$___________ for college.
Assuming college costs don’t increase –
you will have to come up with $4,000
per year, you will still need to borrow
$__________ to pay for college.
To get a loan or not… that is the question…
Annual Net Income
18 $13,728
19 $13,728
20 4 years of college.
$8,580
21 $8,580
22 $8,580
23 $8,580
24 $32,720
25 $32,720
26 $32,720
27 $32,720
$192,656 TOTAL:
What if I want to work so I can pay cash for college?
Making $5,148 more every year.
Save an extra $10,296 for college.
Only need to borrow $5704 to pay for college. (Assuming scholarships and costs all the same as 2 years ago.)
$8.25/hour40/week52 weeks
-20% taxes
$8.25/hour25/week52 weeks
-20% taxes
Salary contract.$40,900
38 weeks14 weeks unpaid
-20% taxes
Total student loan amount = ___________
Current student loan rates: 4.29%
Pay $696.87 per month for 24 months.
Total interest = $724.78
Total Amount Repaid = _____________
Total student loan amount = ___________
Current student loan rates: 4.29%
Pay $248.23 per month for 24 months.
Total interest = $258.38
Total Amount Repaid = _____________
Which life path results in higher pay over the next decade of your life?
_________________________________
Total income for these 10
years AFTER paying off
student loans.
Total income for these 10
years AFTER paying off
student loans.
To get a loan or not… that is the question…
Annual Income
18 4 years of college.
$8,580
19 $8,580
20 $8,580
21 $8,580
22 $32,720
23 $32,720
24 $32,720
25 $32,720
26 $32,720
27 $32,720
$230,640 TOTAL:
Pay off loans quick, cuts total earnings down to $213,915.22
Annual Income
18 $13,728
19 $13,728
20 4 years of college.
$8,580
21 $8,580
22 $8,580
23 $8,580
24 $32,720
25 $32,720
26 $32,720
27 $32,720
$192,656 TOTAL:
Pay off loans quick, cuts total earnings down to $186,693.62
That’s $27,221.60 LESS than if you had gotten student loans!
I can earn just as much without having to go to college.
I can’t afford to go to college…Annual Income
Annual Income
$24,960 18 4 years of college.
$8,580
$24,960 19 $8,580
$24,960 20 $8,580
$24,960 21 $8,580
22 $40,900
23 $40,900
24 $40,900
25 $40,900
26 $40,900
27 $40,900
$8.25/hour25/week52 weeks
-20% taxes
$165/week
$15/hour40/week52 weeks
-20% taxes
$480/week
$16,640 more per year!!!
I can’t afford to go to college…Annual Income
Annual Income
$24,960 18 4 years of college.
$8,580
$24,960 19 $8,580
$24,960 20 $8,580
$24,960 21 $8,580
$33,280 22 $40,000
$33,280 23 $40,000
$33,280 24 $40,000
$33,280 25 $40,000
$33,280 26 $40,000
$33,280 27 $40,000
TOTAL: $299,520 $274,320 TOTAL:
$8.25/hour25/week52 weeks
-20% taxes
$165/week
$15/hour40/week52 weeks
-20% taxes
$480/week
$20/hour40/week52 weeks
-20% taxes
$640/week
Salary contract.$50,000
52 weeks2 weeks PTO-20% taxes
$961/week
$6,720 more per year!
I can’t afford to go to college…Annual Income
Annual Income
$24,960 18 4 years of college.
$8,580
$24,960 19 $8,580
$24,960 20 $8,580
$24,960 21 $8,580
$33,280 22 $64,000
$33,280 23 $64,000
$33,280 24 $64,000
$33,280 25 $64,000
$33,280 26 $64,000
$33,280 27 $64,000
TOTAL: $299,520 $418,320 TOTAL:
$8.25/hour25/week52 weeks
-20% taxes
$165/week
$15/hour40/week52 weeks
-20% taxes
$480/week
$20/hour40/week52 weeks
-20% taxes
$640/week
Salary contract.$80,000
52 weeks2 weeks PTO-20% taxes
$1,231/week
$30,720 more per year!!!
I can’t afford to go to college…Annual Income
Annual Income
$24,960 18 4 years of college.
$8,580
$24,960 19 $8,580
$24,960 20 $8,580
$24,960 21 $8,580
$33,280 22 $32,720
$33,280 23 $32,720
$33,280 24 $32,720
$33,280 25 $32,720
$33,280 26 $32,720
$33,280 27 $32,720
TOTAL: $299,520 $230,640 TOTAL:
$8.25/hour25/week52 weeks
-20% taxes
$165/week
$15/hour40/week52 weeks
-20% taxes
$480/week
$20/hour40/week52 weeks
-20% taxes
$640/week
Salary contract.$40,900
38 weeks14 weeks unpaid
-20% taxes
$861/week
$560 LESS per year!
Most entry level jobs don’t start @ $15/hour
I can’t afford to go to college…Annual Income
Annual Income
$13,728 18 4 years of college.
$8,580
$13,728 19 $8,580
$13,728 20 $8,580
$13,728 21 $8,580
$22,084 22 $32,720
$22,084 23 $32,720
$22,084 24 $32,720
$22,084 25 $32,720
$22,084 26 $32,720
$22,084 27 $32,720
TOTAL: $187,416 $230,640 TOTAL:
$8.25/hour25/week52 weeks
-20% taxes
$165/week
$8.25/hour40/week52 weeks
-20% taxes
$264/week
$13.25/hour40/week52 weeks
-20% taxes
$424/week
Salary contract.$40,900
38 weeks14 weeks unpaid
-20% taxes
$861/week
$10,636 LESS per year – even with!
What else isn’t being accounted for?
Salary jobs come with BENEFITS.
• Health insurance coverage
• 401(k) matching
• PTO
• Lower risk of injury – potentially career ending
• Lower health risks
• Less competition for the job
• Higher job security
Salary jobs come with BENEFITS.
• Last year’s pay scale for 1st year teacher shows that in addition to salary, $16,937 in benefits.
• These would all come out of your own pocket if your job doesn’t have benefits.
Is there any way I can get my student loans forgiven?
“Obama Student Loan Forgiveness Program” aka William D. Ford Direct Loan Program:
• Standard Repayment:
• Graduated Repayment:
• Income Contingent Repayment:
• Income Based Repayment:
• Pay as You Earn (PAYE):
Limit your monthly loan payments to
10-15% of your monthly
discretionary income.
After 20-25 years of monthly
payments, loan balance is forgiven.
Payments start lower than Standard, and
gradually increase over time.
“Public Service Loan Forgiveness”
After 10 years or 120 payments on your student loans, loan balance is forgiven.
Requirements:
• Student loans must be “Direct” student loans.
• You must work full-time for a government agency, a tax-exempt non-profit or a non-tax-exempt non-profit that provides the following services:• Emergency management• Military service• Public safety or law enforcement• Public health, education, or library services• Early childhood education• Public interest law services• Public service for those with disabilities and the elderly..
“Public Service Loan Forgiveness”
• All 120 payments must be on-time. (Not early or lump-sum.)
• Must be enrolled in ICR, IBR, or PAYE plan.
• Must be a full-time employee for the 10 years of payments.
“Teacher Loan Forgiveness”
Have $5,000 - $17,500 of student loan debt forgiven.Requirements:• Work 5 consecutive years full-time at a low-income
school/Title 1 school• (School must be on Federal list when you begin teaching
there.)
• If you teach secondary math, science, or elementary special ed. you are eligible for up to $17,500 of forgiveness.
• All other teachers only get up to $5,000 forgiven.• Have a degree in education directly related to your
teaching position.
“Perkins Loan Cancellation & Discharge”
• Perkins loans are only granted to students in “exceptional financial need”. A % can be forgiven every year you work in public service careers such as: • Peace Corps• Teacher• Military• Nurse or medical technician• Law Enforcement• Head Start• Child or Family Services• Professional provider of early intervention services.
• Eventually, 100% of your Perkins loans can be forgiven.
The RISKS:
• Congress votes to change forgiveness programs before you receive forgiveness.
• You work at the “wrong place”.
• You hate your career after 1-2 years.
• Paperwork problems:• Turned in late
• Missing signature
• Documentation problems• East Tech vs. East Career & Tech vs. East Career & Technical
Academy
The easiest solution:
• DON’T BORROW MORE THAN YOU CAN PAY BACK QUICKLY!
• If you won’t be able to pay it back without loan forgiveness you probably SHOULDN’T DO IT!
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