Kansas State University

For many individuals, college education is seen as a steppingstone to opportunities and career advancement. However, the price to pay for the college education can present a financial barrier caused by rising costs of tuition, textbooks, and living expenses. To break through this barrier, many often use student loans to finance their education. Today we will investigate the intricacies of student loans surrounding the types of student loans, and important considerations surrounding them.

First, let’s go over what a student loan consists of. The first thing to look at is the principal amount. This is the initial sum of money borrowed to cover educational expenses, such as tuition, fees, books, and living expenses. For example, let’s say you borrowed $100 then the principal amount would be the $100 that you borrowed.

Second, is the interest rate which is the cost of borrowing money. For example, if your interest rate was 10% than 10% of the $100 you took on loan would be added to your final balance to pay. For federal student loans, the interest rates are set by the government, while private loans may have variable rates based on creditworthiness of the borrower.

So, what differentiates a loan from a student loan? A loan can be used for any financial expense that the borrower chooses. A student loan is a loan that is used for the purpose of education expenses that include tuition, dining, books, and any financial expense surrounding a student’s education.

Each student is offered a certain amount of loans based off their financial background. To access and figure out how much is available you must fill out a FAFSA (the Free Application for Federal Student Aid). The FAFSA, which is filled out annually, grants students access for their financial aid. You can access the FAFSA here and start working on your application. Since most student’s interested in financial aid look to federal loans, let’s look specifically at that. Federal student aid is a safe and popular way to go about funding higher education. This is due to the many safety nets and financial flexibility surrounding student aid that have been put in place. An example of this is within federal student loans having deferment (the postponing of payments) until six months after graduation. This allows students to not have to start making monthly payments until they have graduated college full-time. There are several types of student aid that a student can pull.

1. Federal Grants: Grants are financial awards that are given by the U.S. government to help financially fund student’s education. These grants are given out to students based on their financial need and determined by the FAFSA form. Think of them as a loan that you received but don’t have to pay back. These are best forms of financial aid that you can receive, and most students accept them in full when given one.
2. Subsidized Federal Loans: These are the next best form of financial aid. These loans are offered by the federal government and do not add interest to the balance of the loan while the loans are in deferment. Instead, the government pays the interest while the student is in school. This allows the student to only pay the principal amount that they were loaned.
3. Unsubsidized Federal Loans: The third form of financial aid are unsubsidized loans. These are loans taken from the federal government that add interest while you are in school. The difference between unsubsidized and subsidized loans is that the government doesn’t cover the cost of interest on these loans. This means that the amount borrowed will increase with compounding interest while the borrower is in school.
4. Parent Plus Loans: A Parent PLUS Loan is a type of loan available to parents of dependent undergraduate students to help finance their child’s education. Unlike other federal student loans that are taken out by students, Parent PLUS Loans are borrowed by the parent on behalf of their child. The problem with these loans is that they come with higher interest rates, on average, which are to be covered by the borrower.

Whatever loan you may choose to take out in the future, remember that a large responsibility comes with these different forms of financial aid. Here are some tips when borrowing:

• Make sure you’re only taking out the amount that you need to pay for your    education expenses. It’s tempting to take the full amount given, but that exposes you to unnecessary risk and interest rates.
• Make sure to read the terms of the financial aid beforehand.
• Make sure you understand what type of financial aid you’re signing up for and understand the interest rates, payment plans, and deferment periods it offers.
• Create a budget that considers loan budgeting and allows you to manage your finances more effectively.

When it comes to paying off a student loans its first important to know who your servicer is. A servicer is the company who you will be paying off your loan too. You can figure this out through your Studentaid.gov account under my aid tab where it will give you the name of your servicer. After figuring this out it’s time to select a payment plan based off what fits you best. There’s a multitude of different payment plans and figuring out which one suits your lifestyle best is key. If you need a better visualization of what paying off these loans could look like use this Loan Simulator repayment which will help give you a better visualization.

Student loans can be seen as a very complex and scary world to walk in, but being able to understand how loans work, where to find them, and the different types of loans will allow you to make more informed decisions when it comes to using a loan.

If you still have any questions or concerns surrounding student loans or creating a budget feel free to schedule an appointment with Powercat Financial. We can help by giving you a stronger understanding of student loans, figure out how much you need, and give you more financial confidence. You can sign up through your Navigate or through our website.

Drew Cason

Peer Counselor I

Powercat Financial

www.k-state.edu/powercatfinancial

What are some important things to do before the interview?

Research the company and read the job description: To go into the interview with confidence, make sure to research the company’s website, social media, and press releases.

Prepare a list of references: Most interviewers will want references from your past employers to show that you have history of experiences that will transfer well into a future role.

Practice answering interview questions: This can be beneficial towards your confidence during a job interview. At the career center at K-State they can help you prepare for your interviews and even hold mock interviews for you.

Prepare your own questions for the company: This can provide the impression that you are thinking about what it would be like to work there.

Decide and layout what clothes you are going to wear: To reduce stress on the day of the interview. It is also beneficial to layout the clothes that you are going to wear so you know you are not missing anything. If you need professional clothes stop at the K-State Career closet to find up to 3 lightly used pieces of professional clothing.

Print updated resume copies to bring to the interview: This shows that you are prepared for the interview. Be sure to bring multiple copies in case there are multiple interviewers. Highlight a copy for yourself with talking points that you might want to bring up during the interview. If you need help revising your resume the career center offers free appointments to help you with that.

Bring a notebook and pen: To take notes during the interview so that you can refer back to details that you think are important after the interview. I do not recommend taking notes on an electronic device as it might be seen as unprofessional.

Plan to arrive 10-15 minutes early: There can be unseen delays before your interview and you do not want to show up late. If you do get to the interview early, take the time to observe workplace dynamics.

What are some tips for during the interview?

Smile and make eye contact: This will make you seem more approachable, confident, and friendly.

Use the STAR method – situation, task, action, and result: This is a good way to respond to behavioral-based interview questions. This method can help you to remember to explain all of the important details when you are explaining a situation.

Be concise: When responding to interview questions it is important to only share the relevant details so that there is more time for other questions during the interview.

Turn off your phone: It would look unprofessional if your phone goes off in the middle of the interview.

Don’t badmouth a previous employer: It can come across as negative.

Ask about next steps in the hiring process: This can be important to let you know when to expect a response or what to expect next.

Tips for after the interview?

Send a thank you note or email: This can show that you are professional and courteous and can make you stand out against other applicants.

Stay Positive: Interviews can be stressful situations just know that as you have more interviews you should become less nervous before them.

What are some good tips for virtual interviews?

• Find a quiet room for the interview (Career Center offers interview rooms)
• Strong internet connection
• Camera and audio are working correctly
• Even though you are remote remember to dress professionally
• Consider a virtual or blurred background
• Position the camera at eye-level
• Arrange your seating so that you are facing a window or another light source
• Sit an arm’s length away from the camera
• Consider using the touch up my appearance
• Download your resume in an easy to find location

What are some common interview questions?

1. Give me an example of a time you had a conflict with a team member. How did you handle it?
2. Tell me about a time you made a mistake at work. How did you resolve the problem, and what did you learn from your mistake?
3. Describe an occasion when you had to manage your time to complete a task. How did you do it?
4. Describe an occasion when you failed at a task. What did you learn from it?
5. Tell me about a time you took the initiative in your career. What was your motivation for doing so?
6. Describe a time when you used your leadership skills to motivate your team or colleagues.
7. Describe a time when you were responsible for a task you didn’t receive training on and were unsure how to complete. How did you handle it?
8. Share an example of a career goal you had. What steps did you take to achieve it?
9. Give an example of a time when you had to make a difficult decision. How did you handle it?
10. Describe your process for solving problems. What steps do you take to resolve important issues at work?

James Turner Andrews Jr.

Peer Counselor I

Powercat Financial

www.k-state.edu/powercatfinancial

Considering saving for retirement as a college student may seem crazy, but it could benefit you more than you may realize! Below are some common questions and answers regarding retirement planning. Even if you do not have the financial capacity to begin saving now, it is a great topic to be educated on as you move through your adult life. Saving as soon as you are in a comfortable financial situation and are earning a steady income is something your future self will thank you for!

1. Is there a process I should follow?

a. Before investing, establish an emergency fund.

i. An adequate emergency fund is equivalent to 3-6 months of living expenses. This money would be set aside for emergencies such as a car accident, an event that will force you to miss work as an hourly employee, a health emergency, etc.

     b. Next, pay off debts.

i. Some believe you should pay off all debts before saving for retirement.

ii. Some believe you should feel comfortable with your debts, then save.

iii. Below is a resource that goes in depth on what should be prioritized: https://www.debt.org/retirement/prioritize-savings-vs-payoff/

     c. After paying off debts, begin investing in your future.

2. When should I start?

a. The earlier the better

i. Compounding interest is a very powerful with time on your side. Compounding interest is interest that accumulates not only from your initial principal amount, but also from the interest earned on that principle in previous periods.

ii. Below is a link to a resource that includes a visual representation of the power of compounding interest.

https://www.ramseysolutions.com/retirement/how-does-compound-interest-work

As you can see, Ben started investing at age 21, but only contributed for ten years. Joey, on the other hand, started investing at age 30 and invested the same yearly amount as Ben, but for 37 total years (27 years more than Ben!) Due to the difference in timing, Ben’s retirement fund grew to almost double what Joey’s did, even though he initially invested $67,200 less than the amount that Joey contributed.

3. Retirement is such a complex topic; how should I know what kind of account to invest in?

a. Pensions

A pension is a retirement program where an employer makes contributions and controls investments, so that when an eligible employee retires, they receive a fixed payout. This is different from other plans because the employee never actually contributes money. The employee just receives income after they retire if they have worked for the company for a specified period.

     b. 401(k) / 403(b)

More commonly, these are employer sponsored plans that employees contribute to and generally control what their account is invested in. A 401(k) is typical for most companies, but a 403(b) is for teachers employed by a public school. There are yearly limits for how much money can be contributed by an employee, but these amounts change yearly. There are also employer match programs where an employee contributes a percentage of their salary, and their employer matches that, or contributes the same amount. This is beneficial because it is practically free money! A 401(k) can be either Roth or Traditional, which I will discuss more below.

     c. Roth IRA / Traditional IRA

Finally, there are Individual Retirement Accounts (IRA’s).  An IRA can be either Traditional or Roth, which has to do with tax treatment. The difference between an IRA and a 401(k) is that an IRA is not employer sponsored. You typically open IRAs through a bank or financial institution. Traditional means that money goes into the account pre-tax, meaning you pay taxes on it at the time it is withdrawn. This type of account grows tax deferred. On the other hand, Roth IRA contributions are after-tax meaning you pay tax on it when contributed rather than when withdrawn. This account grows tax-free. IRAs also have yearly contribution limits, similar to a 401(k).

Note: Although there are limits on how much can be contributed to retirement accounts like IRAs and 401(k)s, there are options to have more than one type of retirement account.

4. Once I have established my emergency fund and feel comfortable with my debt, how much money should I be contributing to my retirement account(s)?

a. This question really depends on each person’s personal situation. For a             college student taking out student loans, making it through college and           reducing loan debt might be the first goal. For a college student with no           loans and steady income, there might be a certain amount of each                   paycheck that could be contributed- but that amount would depend on             the income and living expenses. For a full-time employee of a                         corporation, it might be a certain percentage of their salary depending             on their employer’s match program. In conclusion, the specific amount             or percentage, as well as what type of account to invest in, depends               solely on the circumstances. Connect with an investment advisor to find           the right plan for you.

If you would like to learn more about this topic, schedule a free and confidential appointment with Powercat Financial through your Navigate student portal under Financial Services.

Katelyn Silcox

Peer Counselor I

Powercat Financial

www.k-state.edu/powercatfinancial

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Credit scores are amazing tools that you can use to your advantage! Let me tell you how! Your credit score can be referred to as your “financial GPA.” It’s a record of how reliable you are at paying off your debts/lines of credit. In the same way that your school GPA is a record of how reliable you are as a student.

So why are credit scores so important? Well, let me show you two different scenarios that happen often.

Ashe and Scout:

Ashe and Scout are roommates attending K-State. They have known each other since freshman year when they shared a dorm. They both applied for a credit card together while still living in the dorms. They each get accepted for a student credit card even though neither of them had a credit score previously. Each of their credit cards has a $500 limit. Ashe wasn’t sure how to best use a credit card and decided to schedule an appointment with Powercat Financial to get some tips and information from a peer. Scout felt like credit cards were easy and not that complicated.

Ashe starts out using their card for gas and paying it off every time they use it. Scout, on the other hand, uses their card for just about everything, while paying the minimum payment almost every month. Freshman year ends, Ashe and Scout decide to get an apartment together. Both need a cosigner because they haven’t had a credit score for very long. Both are using their cards the same way they did in the dorms and their credit card limits have both increased to $1,500.

Sophomore year goes by, Ashe and Scout are still living together but decide to move to a house for more space. This time, Ashe does not need to have a cosigner for the lease, but Scout does. This is because Ashe’s credit score is higher than the minimum required credit score to sign a lease by themselves. Scout still needs to have a cosigner because their score is not higher than the minimum requirement.

Scout and Ashe have never discussed how they use their credit cards. Scout is confused that Ashe doesn’t need a cosigner now. They have a conversation and realize that they are using their cards very differently. Scout schedules an appointment with Powercat Financial to learn about healthy credit card practices and how to pay off their credit card debt. After the meeting, Scout feels more empowered and confident in themselves to use a credit card more responsibly and now has a plan to pay off the credit card debt that has accrued.

During senior year, Ashe’s car breaks down and they need to get a new one. Ashe goes around town and finds a $10,000 used vehicle that will require a loan. Ashe goes to their bank and applies for an auto loan. The bank approves Ashe’s application because their credit score is 670, the interest rate on this loan is 9.73%. Scout applies for the same loan at the same bank for their first car ever. Scout’s credit score is 490 so their interest rate is much higher, at 21.55% for the $10,000 used car they wanted.

After graduation, Ashe starts looking for a house to buy near their new job. Ashe’s credit score is now 770 because Ashe has been paying a little more than the minimum payment on their car loan every month and has continued to pay their credit card off in full every month. Because Ashe’s credit score is almost 800, they are in the “very good” credit range and get an interest rate of 5.99%. Scout would also like to purchase a house, they pay the minimum payment on their auto loan, but have been paying off their credit card in full every month since meeting with Powercat Financial. So, Scout’s credit score is now 665! This is in the “fair” range, where previously, Scout was in the “poor” range.  If Scout and Ashe apply for the same loan amount in the same zip code, Scout’s interest rate for their mortgage is 6.88%.

So, what does this mean? Great question! If Scout didn’t change their habits and still had a 490 credit score (potentially lower over time), they might not have gotten approved for the mortgage at all. Even though their credit score increased, the 1.11% difference in Ashe and Scout’s interest rates is a significant amount of money. For the same $208,000 loan, Ashe would pay $240,000 in interest whereas Scout would pay $284,000 in interest. So, for that 1.11% Scout had to pay $44,000 more than Ashe.

This story is to illustrate how important credit and your credit score are. A credit score “is the power to borrow money” (Experian). It is the ability to get something now and pay for it later. Typically, things that will be hard to have all the cash needed for the purchase, like a vehicle or home. You can utilize your credit score to leverage great deals for loans, cell phone plans, apartments, credit cards, etc.

If you have any questions about how to check/improve your credit score or just to learn more information about credit in general, please schedule a meeting with one of our peer counselors or look through our website.

Kirsten Ouellette

Peer Counselor I

Powercat Financial

www.k-state.edu/powercatfinancial

Are you tired of feeling overwhelmed by debt or is it becoming hard to keep track of the various lines of credit you have established? As a student, managing debt and maintaining financial responsibility can be particularly challenging. With the demands of academic life, the temptation of coming across easily accessible credit, and the constraints of limited income, settling a balance on time can be a difficult task. In the following paragraphs, we will explore various strategies and tools to help students or graduates manage debt responsibly. From zero-based budgeting to credit monitoring and beyond, we will cover a bulk of information that you should know to take control of your finances and manage your debt responsibly.

Strategies and Tools to Help Manage Your Debt:

Zero-Based Budget: During my internship over the past summer as a Registered Investment Advisor, I learned the importance of assigning a purpose to every dollar earned, especially when it comes to managing debt responsibly. Zero-based budgeting is a powerful tool that supports the principle that every dollar must serve a specific purpose or goal. As the name implies, zero-based budgeting involves allocating all income towards expenses and savings until the balance equals zero. To help bring light to zero-based budgeting, consider the scenario of a student with $3,250 monthly income, distributed across the following expenses and debt payments:

Reference: https://blog.mint.com/wp-content/uploads/2020/11/how-to-create-a-zero-based-budget.png?resize=768,970

This principle is not only crucial for effective budgeting but also holds significant relevance in managing debt responsibly. Understanding where each dollar goes helps in prioritizing expenses, avoiding unnecessary debt accumulation, and ensuring that every financial decision you make contributes to your long-term financial goals.

Credit Monitoring: Managing your debt responsibly can feel overwhelming at times, especially when you have multiple lines of credit established through various vendors. It can then become easy to lose track of credit accounts you have opened, potentially leaving balances unnoticed and affecting your credit score greatly. The good news is that individuals can access their credit reports for free once a year from each of the three major credit bureaus: Experian, Equifax, and TransUnion. By strategically structuring your requests, you can obtain three separate credit reports throughout the year, each from one of the three different credit bureaus. For example, you could pull one report every four months. This approach keeps you consistently informed about your credit status and empowers you to adjust your spending behaviors to positively impact your credit over time.

Budget Tracking & Planning Applications: When it comes to managing debt responsibly, standard budgeting can be just as impactful, if not more so, than zero-based budgeting. Budgeting tools like Goodbudget and NerdWallet offer much assistance with debt management through their free budgeting platforms. Utilizing such tools can allow you to create personalized budgets tailored to your financial objectives and debt repayment targets.  Additionally, these tools provide a comprehensive view of all of your accounts, automatically categorizing your monthly expenditures. One feature of these tools is their capability to securely link to your personal accounts, allowing you to monitor and analyze any recurring subscriptions and more. This feature can be very beneficial since it is not uncommon for individuals to overlook subscriptions that they no longer use, resulting in unnecessary payments that can accumulate over time and contribute to their overall debt. These features and budgeting as a whole can play an important role in responsible debt management by providing clarification, control, and direction to your finances and debt. By creating a budget, you can begin to gain awareness of your income and expenses, which can allow you to prioritize debt repayment while also preventing overspending. With a well-crafted budget, you can implement effective debt repayment strategies, build financial discipline, and begin working towards achieving long-term financial stability.

Automatic Payments: Another responsible strategy for managing your debt effectively is to set up automatic payments for your credit cards. By automating your credit card payments, you can ensure that you never miss a due date, allowing you to avoid any late fees and damage to your credit score. On that note, it is important to keep in mind that your payment history or whether you make you payments on time, makes up roughly 35% of your credit score. Setting up automatic payments can help maintain consistent debt repayment, as payments are made on time each month without the need for manual involvement. Additionally, automatic payments can assist in budgeting by including debt repayment into your financial plan seamlessly. By committing to regular payments, you can begin to chip away at your credit card balance, reducing your overall debt load over time.

Powercat Financial: When it comes to managing debt responsibly, students can turn to peer counselors for support and practical tools. Powercat’s peer financial counselors can provide guidance through resource tabling’s and peer-led financial education sessions. Students can use Powercat’s provided spending plan worksheet, a three-step process for estimating and tracking expenses, with counselors to assist along the way. The three-step process includes 1) students estimating their monthly income and expenses, while also distinguishing between needs and wants, 2) students record their actual income and expense, while comparing them to their initial estimates to gain an understanding of their spending habits, and 3) students can then analyze their financial records to identify any necessary adjustments and create a spending plan for the following month. Beyond budgeting, counselors at Powercat Financial can help students reflect on their money attitudes and offer strategies for financial behavior change. By utilizing Powercat Financials resources, students can develop responsible debt management habits and achieve long-term financial success.

Mastering debt and strengthening financial responsibly as a student are important steps towards securing a stable financial future. By implementing strategies such as zero-based budgeting, monitoring your credit, utilizing budgeting applications, setting up automatic payments, or scheduling an appointment with a peer financial counselor at Powercat Financial, students can begin to effectively manage their debt responsibly and work towards achieving their financial goals.

One valuable resource available to students at K-State is Powercat Financial. Here at Powercat Financial, we offer free counseling services to students seeking financial assistance, with one of our most valuable services being budgeting and credit & debt management. To schedule an appointment with a counselor at Powercat Financial, please visit our website using the following link: https://www.k-state.edu/powercatfinancial/. During your appointment, you can discuss your financial concerns, receive personalized advice, and even create a spending plan worksheet or college financial plan tailored to your specific needs and goals. By taking initiative now, you can begin to lay the foundation for a secure financial future both during school and beyond.

Quinton Vlach

Peer Financial Counselor II

Powercat Financial

www.k-state.edu/powercatfinancial

Spring break is right around the corner, and as a college student, you’re probably daydreaming about the perfect getaway. But let’s face it, the struggle of balancing goals with a student budget is real. Fear not! With some strategic planning and smart saving, you can turn that dream vacation into a reality. Here’s your ultimate guide to planning and saving for an unforgettable spring break.

1. Start Early and Set a Budget:

The early bird catches the worm, right? Well, in this case, the early planner catches the best deals. Start by setting a realistic budget. Consider your current savings, potential earnings, and any financial aid or gift money. Once you have a figure in mind, you can begin planning accordingly.

2. Research Destinations and Accommodations:

Not all spring break destinations are created equal, and some can be surprisingly budget friendly. Do your research and look for locations that offer a good mix of fun and affordability. Consider Airbnb or Vrbo for accommodations, which can be significantly cheaper than traditional hotels.

3. Plan with Friends:

The more, the merrier, and the cheaper! Planning with friends can lead to group discounts on accommodations, shared transportation costs, and potentially group rates on activities. Plus, traveling with friends often means more fun and shared memories.

4. Hunt for Deals and Discounts:

Once you’ve chosen your destination, scour the internet for deals and discounts. Websites like StudentUniverse, Skyscanner, and Groupon can be your best friends. Keep an eye out for early bird specials, student discounts, and package deals that bundle flights and accommodations.

5. Embrace the Side Hustle:

Consider picking up a side hustle to boost your spring break fund. Whether it’s freelancing, tutoring, or even a part-time job, a little extra income can go a long way. Just make sure it doesn’t interfere with your studies.

6. Cut Back on Non-Essentials:

Evaluate your spending habits and identify areas where you can cut back. Skip the daily latte, cook at home instead of dining out, and resist the urge for impulse purchases. Redirect the money saved toward your spring break fund.

7. Create a Dedicated Savings Account:

Separate your spring break savings from your regular funds by creating a dedicated savings account. This not only helps you track your progress but also adds a psychological barrier to dipping into the funds for non-essential expenses.

8. Plan Your Itinerary Wisely:

Planning your itinerary in advance can save you money and ensure you make the most of your time away. Look for free or low-cost activities, explore local markets, and take advantage of student discounts on attractions.

9. Pack Smart:

Avoid last-minute shopping sprees for travel essentials by planning your packing well in advance. Make a list, check it twice, and ensure you have everything you need. This prevents unnecessary spending on items you forgot to pack.

10. Stay Financially Responsible:

While spring break is all about letting loose, it’s crucial to stay financially responsible. Set a daily spending limit, keep track of your expenses, and avoid unnecessary splurges that could leave you with post-vacation blues.

In conclusion, with careful planning and disciplined saving, you can have an incredible spring break without breaking the bank. So, start planning, start saving, and get ready for the adventure of a lifetime! Your dream spring break awaits – make it happen!

Jackson Rohn

Peer Financial Counselor I

Powercat Financial

www.k-state.edu/powercatfinancial