Kansas State University

search

Powercat Financial

Author: Powercat Financial

Director of PFC

Jodi’s Corner: A Decade of Excellence at Powercat Financial

We can’t believe it’s the start of 2020! It’s going to be a perfect year as Valentine’s Day is on Friday, Cinco de Mayo is on Taco Tuesday, 4th of July and Halloween are both on Saturdays, and Christmas will be on Friday! YIPPEE!

We also can’t believe Powercat Financial has been in existence now for 10 years at Kansas State University! We wanted to take this opportunity to thank all of our supporters and students who have contributed to our success. We especially want to thank the over 350 students who have served as peer financial counselors, Student Advisory Board members or Residential Financial Specialists that are passionate about helping fellow K-State students with financial education. They have helped students navigate the complexities of paying for college, balance school and work, understand federal student aid, manage student loan repayment, negotiate job offers,  build good credit habits and more.

When K-State created Powercat Financial in 2009, it was the first peer-to-peer financial education program in the state of Kansas and one of few in the country. Now Powercat Financial is seen as a national leader and more and more colleges and universities are creating financial education centers as this support is seen as a critical mission in higher education. In fact, there is now a national alliance of college financial wellness programs called the Higher Education Financial Wellness Alliance that serves to bringing together post-secondary organizations to inform national conversations that impact the financial wellness field, public policy, and educational support services.

Thank you for being a subscriber to our Powercat Financial blog and joining us in learning more about financial wellness topics. When the peer financial counselors return from break the end of January, we will resume our weekly blog posts of helpful money tips created for students, by students. In the meantime, look through our archived posts for lots of helpful financial information we have shared over the years.

Please let us know if we can be of assistance to any K-State student needing financial guidance in 2020 or beyond!

Students can request a free appointment with one of our peer financial counselors via www.k-state.edu/powercatfinancial.

Jodi Kaus, JD, CTFA – Director

PowercatFinancial

www.ksu.edu/Powercatfinancial

The Impact of Interest Rates

What are the true costs of borrowing money? One of the major factors when borrowing money is the interest rate, also known as what the company you are borrowing money from is charging you. The main places college students will experience the impact of interest rates is on student loans and credit cards. Taking caution when making decision regarding these two areas is very important! Decisions we make now can have long-term impacts on our financial situation.

Student Loans

While some students have to borrow large amounts of loans to pay for school and others do not borrow any, the average amount of student loan debt per borrower at Kansas State is $26,216. It is very important to remember, however, that you will not end up only paying the original amount you borrowed in school. The interest rates on your loans will increase the amount you have to pay back over time. Let’s take a look at a few different types of loans and how their interest rates would affect paying back the Kansas State average of $26,216.

Federal Direct Unsubsidized Loan – 2019 Rate: 4.53%

  • If you stay on the Standard repayment plan for these loans, which is consistent payments for 10 years, you would pay a total of $32,604.
  • This is $6,388 in interest over the 10 year life of the loan.

Federal Direct Parent PLUS Loan – 2019 Rate: 7.08%

  • These loans will be registered in your parent’s name. If you stay on the Standard repayment plan for these loans, which is consistent payments for 10 years, you would pay a total of $36,683.
  • This is $10,467 in interest over the 10 year life of the loan

Private Loan – Average Fixed Rate: 9.66%

  • These are loans you could find from a bank, credit union, or private loan servicer. Their interest rates are based on your credit worthiness, while loans from the government are not. If you stay on a 10-year repayment plan for these, you would pay a total of $41,053.
  • This is $14,837 in interest over the 10 year life of the loan.

As you can see, interest rates can make a huge difference when you have to pay back your loans! Before accepting financial aid next semester or next year, be sure to check the interest rate first.

Credit cards

If you think interest rates on student loans are high, you’ll be surprised to hear that credit card interest rates, known as the Annual Percentage Rate, can be more than double what student loan interest rates are. It is not uncommon for college students to have APR of 20-25%. Being conscious of your credit card interest rate is important for two main reasons.

  1. If you pay your balance off in full each month, the interest rate will never affect you. The interest rate is how the credit card companies make money and it will only apply if you still owe money at the end of each month. They give you the option to make a minimum payment, but you should pay off the full balance if you are able to.
  2. If you only make minimum payments, the amount you owe will continue growing at a very quick pace. For example, if you owed $5,000 with a 14% APR on your credit card and only made minimum payments, which were 2% of the balance, it would take you 22 years to pay off that amount. Credit card companies are required to tell you how long it would take to pay off your balance on each statement if you made minimum payments. You can find this on your monthly statement!

With this knowledge, I want to encourage all of you to think cautiously when making decisions about your student loans and credit cards. Interest rates do have a major impact!

Sources: https://www.thebalance.com/how-long-to-pay-off-balance-with-minimum-payments-961120, https://www.investopedia.com/student-loan-debt-2019-statistics-and-outlook-4772007

Thomas Meek
Peer Counselor II
Powercat Financial
www.k-state.edu/powercatfinancial
powercatfinancial@k-state.edu

Time to find that part-time job!

Part-time jobs can be beneficial to students regardless of their financial status and should be one of the first things they do when they get on campus. Students who work part-time jobs gain valuable real life work experience, develop interpersonal skills, and improve their time management. In fact, the Bureau of Labor Statistics even found that students working less than 20 hours a week earn about 0.10 higher GPAs than those who don’t work at all. The bottom line is, part-time work can assist students in their professional development in many ways. Today, we’ll be discussing where you can find part-time work and how to get that job.

Finding Part-Time Work:

It might seem a little overwhelming at first, but finding a part-time job at K-State is easy! Handshake is an online resource you can use that can help you find who is hiring in your area and then easily connect with them. Through Handshake, you can search/ refine job postings, review career fair information, manage on-campus recruiting, and even find internships or full-time work. Students interested in setting up a Handshake account can do so with their K-State eID at https://www.k-state.edu/careercenter/handshake/.

Application:

Chances are, finding a part-time job, or any sort of job, will begin with an application process. The application is a critical part of the process. Before submitting anything, make sure to read the job description. This will have important details of what the employer is looking for and can help you phrase your resume and application appropriately. Additionally, the required qualifications can also help you tailor your resume to what your employer is looking for, but it can also help determine if this job is the right fit for you.

Work Study:

One way in which students can make themselves more marketable to potential employers is through the federal work study program. Students who qualify for work study through the FAFSA, Free Application for Federal Student Aid, are eligible to have their paycheck paid partially by the Federal government. This makes employers more likely to hire students and allows students to work part-time jobs throughout their education. Once you receive work study in your aid package, the next step is to secure an on-campus job and to let your department HR person know you have work study eligibility. They will then have to complete a Position Description form and submit it to the Office of Student Financial Assistance to begin applying your work study aid to the department to help fund your paychecks.

Benefits of Part-Time Work:

Aside from helping you professionally, one of the primary things employers look for in hiring full-time candidates is previous work experience. Often times, students find themselves in the vicious cycle of not being able to gain work experience due to their lack of previous work experience. Part-time jobs allow students to break this cycle by gaining valuable transferrable skills. Furthermore, students with part-time jobs have the opportunity to make connections that may be beneficial to them in the future and improve on their time management skills.

If you found this article useful or are interested in learning more about where you can find part-time work, then Powercat Financial can be an awesome resource for you! Peer Counselors can help you build a budget to plan how many hours you’ll need to work, can help you evaluate job offers, and can help you understand benefits. For more information, check out our website and schedule an appointment with us!

 

Avery Bolar

Peer Counselor III

Powercat Financial

302 K-State Student Union, Third Floor

918 N. 17th Street

Manhattan, KS 66506-2800

785.532.2889

www.k-state.edu/powercatfinancial

PowercatFinancial@k-state.edu

Protecting Yourself on the Road: A Simplified Guide to Car Insurance

Traffic around campus during the school year can be chaotic. I recall driving through campus on the first day of class. The sun was in my eyes, cars were lined up behind stoplights, students were crossing the street everywhere, and everyone was in a hurry to make it to class on time. Although I am gripping the steering wheel so hard my knuckles turn white, I have peace of mind knowing my truck has full coverage and I am financially prepared in case of an emergency.

I consider myself to be a great driver, but no one is perfect. Everyone carries the risk of getting in a car accident, but most people carry less financial risk because of insurance. The question many people ask is: “How do I know if I’m financially protected in case of an accident?” Insurance policies can contain language that may seem foreign, so sometimes it is difficult to understand what you are paying for. I will outline some of these terms and concepts, so you can select the best policy for you and be better prepared for financial emergencies.

Basic Insurance Terms:

Limits: The maximum amount that a policy will pay out. It can be expressed in several ways such as an annual limit, per person limit, or per accident limit.

Premium: The dollar amount you pay the insurance company for a particular policy.

Deductible: The amount you have to pay before the insurance policy pays. For auto insurance, this is typically the amount you pay per accident. Example: You get in an accident and your repairs are $2,000 and your deductible is $1,000. You are required to pay $1,000 and the insurance policy will pay the other $1,000.

Basic types of Coverage:

Liability: Coverage in case you get into a car accident and it is your fault. If the other person involved in the accident gets hurt or has damage to their vehicle, you are responsible for paying for these damages (including medical expenses resulting from bodily injury). Liability coverage will pay up to a certain limit to the injured third party. Your policy will often have stated limits of liability that look like this:

300/500/300 or $300,000/$500,000/$300,000

The first number represents the bodily injury liability limits per person. So this policy will pay $300,000 for every passenger that was injured in an accident you caused. The exception to this is if you reach the per accident limit (the middle number) of $500,000. The policy will not cover you for over that amount for each accident you cause. For instance, if you have the limits listed above and you injure 2 passengers who each have $300,000 worth of medical expenses for a total of $600,000, you will be responsible for paying $100,000 out of pocket. The last number represents how much coverage you have for damage to someone else’s property, stated on a per accident basis.

Vehicle Coverage – Comprehensive and Collison: This type of coverage protects you financially in case your vehicle was damaged in an accident. Collision insurance protects your vehicle if you were to get in a wreck. Comprehensive, also known as other-than-collision coverage, protects your vehicle from other things like fire, vandalism and hail. The purpose of this coverage is to pay for repairs to your vehicle after an accident, or help you replace your vehicle in the event of a total loss. An agreed upon deductible will apply in this type of coverage. So for instance, if you have a $1,000 deductible and your repairs after an accident only cost $750, you are required to pay for the repair fully out of pocket.

Keep in mind that there are many other types of coverage you can get in an auto insurance policy that are worth taking a look at. Accident forgiveness, Personal Injury Protection, and Uninsured/underinsured Motorist are all different types of coverages you can add to your policy.

Tips for selecting the right policy:

When it comes to picking the right policy for you, you have to find something that you can fit in your budget, but at the same time, protect you and your assets. Buying insurance is similar to setting up an emergency savings account, they are both helping you prepare for the unexpected.

When selecting liability limits, understand that Kansas law requires you to have at least 25/50/10 limits of liability. Is that enough? Absolutely not. How many vehicles in Manhattan are worth more than $10,000? In a bad accident with multiple vehicles, medical expenses can easily soar past $50,000. So what are acceptable limits? Most insurance agents recommend getting the highest limits that you are offered and can afford premium-wise. Financial guru Dave Ramsey says that you should have at least $500,000 worth of liability coverage. Keep in mind newer drivers might not be offered limits this high.

Comprehensive and collision coverage may be expensive depending on the value of your car. If you have a brand new vehicle, you’ll likely want to have this coverage. If you drive a very old and very inexpensive car, you’ll have to weigh your options and risk. One opinion indicates, if you have enough emergency savings to replace the vehicle and it carries a very low resale value, then you might consider forgoing the coverage.

One way to save on comprehensive and collision coverage is to raise your deductible. Although you will have to pay more out of pocket in the event of an accident, you will likely save a lot more by having lower premiums. Your premiums are also based on your driving history (tickets and accidents), age, and even your credit score.

The last piece of advice I would give is make sure that you understand your policy and how you need to react in the event of an accident. There are also certain exclusions in an insurance policy that will state when coverage will not be granted. Know how your insurance company wants you to handle reporting any claims.

Managing risk can be stressful. We deal with uncertainty every day. If you are wondering how you can be better prepared for emergencies and want some advice on saving and budgeting, make an appointment with a peer financial counselor! You can schedule a free appointment by visiting our website: https://www.k-state.edu/powercatfinancial/

References:

https://www.daveramsey.com/blog/how-much-car-insurance

Morgan Flax

Peer Counselor II

Powercat Financial

www.k-state.edu/powercatfinancial

Jodi’s Corner: It’s the beginning of a new year and it’s out with the old and in with the new!

From 2012 through 2018, Kansas State University partnered with American Student Assistance (ASA) to provide their Saltmoney.org (“Salt”) online financial tool as a resource to K-State students and alumni. ASA retired the Salt platform on December 31, 2018, thus Saltmoney accounts are no longer available.

Powercat Financial continues to offer all of its other suite of financial services to current students as it has for the past 10 years! A free online financial tool called CashCourse.org is available as an alternative to Salt and is found within the Powercat Financial list of available course at http://www.k-state.edu/powercatfinancial/programs/.

To encourage students to check out the CashCourse.org financial tool there is a new “Get Money Savvy With CashCourse” badge in K-State 360. With this new badge, students will obtain financial skills training on a variety of essential life skills via free resources offered in the online financial tool at CashCourse.org. Plus all students who complete this new badge by April 15, 2019, will be entered into a drawing for a $200 gift card. Students may learn more about our K-State 360 badges at http://www.k-state.edu/powercatfinancial/360/.

All of the valuable financial resources offered by Powercat Financial are still on our website at www.k-state.edu/powercatfinancial. Student loan servicers or lenders may also be contacted for any specific student loan support issues, along with K-State’s Office of Student Financial Assistance. Current K-State students on the Manhattan campus and Global Campus may continue to seek financial education from Powercat Financial and request free individual financial counseling sessions via k-state.edu/powercatfinancial. Campus student groups and classes may also continue to request financial workshops and presentations from Powercat Financial via the online form at www.k-state.edu/powercatfinancial/services/presentations.

Our Powercat Financial blog followers may also want to check out the blog by CashCourse creator NEFE (National Endowment for Financial Education) found at https://www.onyourown.org/. The blog has a fresh new look that aims to provide young adults with an engaging financial education experience.

Powercat Financial looks forwarding to helping all student achieve their financial goals in 2019! Happy New Year!

To request your free appointment, visit our website at www.ksu.edu/powercatfinancial.

Jodi Kaus, JD, CTFA
Director
Powercat Financial
powercatfinancial@ksu.edu

 

Top 10 Financial Services Our Peer Financial Counselors Offer Students

Powercat Financial is here to support students through their journey to becoming financial independent and to staying on the path of financial wellness. Below are a few of the helpful, free services our peer financial counselors offer fellow students:

  1. Assistance creating a personal spending plan to achieve financial goals of studying abroad, saving for emergencies, buying a car, moving off campus or just staying on budget;
  2. Helping you get all of your student loan information organized and explained in an easy-to-understand method to reduce your confusion;
  3. A review of your credit report to make sure it is accurate and has no mistakes or identity theft concerns;
  4. Cutting through the complexity of student loan repayment and explain the various repayment options;
  5. Explanation of the pros and cons of either consolidation or refinancing of student loans;
  6. A review all of the factors that are important when trying to increase your credit score;
  7. Help with determining who your federal loan servicers are and helping you connect with them;
  8. Assistance creating a to-do list of important financial tasks and deadlines for being successful as a K-State student;
  9. Helping you review job offers and understand the employee benefits and prepare questions to ask your future employer;
  10. Exploring any loan forgiveness programs that you may be eligible for.

All of these services are offered in a personal, confidential setting in 302 Union (on the Union third floor) with a trained peer financial counselors who understands what it is like managing financial decisions as a students. They can help you reduce your financial stress, avoid costly financial mistakes and learn how to create your path to financial wellness.

Current K-State undergraduate or graduate students on the Manhattan campus, Vet Med students and Global Campus student may request a free appointment online anytime at www.k-state.edu/powercatfinancial.

Jodi Kaus, Director

Powercat Financial

powercatfinancial@k-state.edu

Subscribe By Email

Get every new post delivered right to your inbox.

This form is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.