UPX Material - University of Phoenix



University of Phoenix Material

Responsible Borrowing Worksheet

Many students will borrow federal student loans to pay for college. The goal of this assignment is to help you learn how to borrow responsibly, which may mean that you do not borrow at all or that you borrow only what you truly need. To borrow responsibly, you must understand your options and establish a financial plan for your entire program. With that plan in place, you can then focus on your classes and making connections with instructors and other students.

Step 1

Watch the “Responsible Borrowing (Financial Aid)” video on the student website. Respond to the following questions:

• What is financial aid?

Direct text in video is: “Financial aid is funding assistance that comes from a source outside of student’s ways and means…including scholarships, state grants and employer programs. Federal financial assistance comes in the form of either loans or grants.”

• How do grants differ from loans?

Direct text in video is: “A loan is borrowed money. As such, a loan needs to be paid back….with interest. All loans need to be repaid when you successfully complete your degree program or if you withdraw from the university for any reason.” “Students are not required to repay Pell grants. Anyone can apply for a grant, but not all are eligible.” To put it simply, grants do not need to be repaid; loans do need to be repaid.

• What effect does class attendance have on funding availability?

Direct text in video is: “Remember that a lack of attendance or failure to start a course as scheduled may delay, cancel, or interrupt funding altogether” In other words, you must be enrolled and attending a class to receive federal aid.

Step 2

Navigate to the Personal Finance category of the GEN/127 PhoenixConnect Community. Explore the resources provided and some of the discussions shared by the community members. Respond to the following questions:

• What did you find about student loan repayment plans?

Possible answers: Federal student loans have several different repayment plans available. Standard repayment will usually pay the loan off within 10 years and will have the same payment each month. Graduated repayment starts at a lower amount and gradually increases every 2 to 3 years. Extended repayment allows for payments up to 25 years at a lower monthly amount. And several income-based plans set monthly payments on factors such as family income, household size, and student loan debt.

• Why is having an educational financial plan important?

Possible answers: College is an investment, and planning for that investment allows you to make the right decisions. Some will focus on the current tuition amount due, or for a year of classes. Yet earning your degree will likely take longer, and you need to understand how you will pay for the entire program. Creating an educational financial plan provides the estimated program cost, and then walks you through the steps to pay, including grants, scholarships, personal contribution, employer reimbursement, and loans. Having this plan may help you borrow less money and focus on being a successful student.

Step 3

Access the Financial Plan at phoenix.edu/financialplan. Enter your program and respond to the questions. Explore the information about options for payment, reducing cost, and military students (if applicable). If you have already completed the plan as part of the enrollment process, you can use those results for this step.

• Based on this plan, what is your estimated monthly payment when you enter repayment?

Possible Answers: The maximum a student can borrow in federal student loans for a Bachelor’s program is $57,500, and the monthly payment would be $661.71 (at 6.8% interest). A student could potentially have a loan payment of $0-661. The majority of our students borrow and you should expect to see a monthly payment of at least $50.

• As a result of completing the plan, what changes can you make to reduce the amount you may borrow? Why?

Possible Answers: The Financial Plan should help the student see all options to pay for school, with loans as the last option. Students may mention applying for more grants and scholarships, paying more out-of-pocket from current income, or finding a job with tuition reimbursement. Why? Reducing the amount borrowed will decrease the future monthly payment, and lower the total interest cost paid for loans.

................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download