Benefits of Summer Employment

As the school year ends once more, many students will start thinking about summer vacation and all the things they can do to fill up those sunny days.

For some this means actual vacation and a fun trip somewhere with family or friends. For others, this could mean activities around the community or a weekend road trip. For many, this means a summer job, and finding that perfect mix of work and fun.

Having a summer job is a great benefit no matter your age. For younger high school students, it’s a great way to start earning some extra cash and building some employment experience. For older students closer to graduation, this could be a time to explore future job opportunities and to save some money toward college expenses.

No matter your stage in the game – here are some great benefits to summer employment and the best ways to prepare.

Start early. If you want more than just a summer job, start early and make some connections. You could use your summer work experience as a job shadow or internship in a career field that interests you. Use your summer to experience a day in the life of a potential future career. Talk with your school counselor about local connections, or contact a local business that interests you about summer openings.

Experience. Even if your summer job doesn’t end up being in a field or industry that truly holds your passion, any work experience can be meaningful. You’re starting to build employment history and you’re going to learn about responsibility, time management, teamwork, and maybe even leadership. These are all important skills to develop and will help you when you start looking for work in areas that peak your interest.

Save. Summer jobs are a great opportunity to put some money in the bank for college. You don’t need to save every penny, but a good chunk going towards savings can save you a lot when it comes time to look at college tuition, books, or apprenticeship and job training programs. Try and save 30-50% and get a jump start on the future.  The more you are able to save, the less you have to take out in student loans and the more options you’ll have in planning your future.

Balance. With all that said, be sure and find balance. Because the saying “You’re only a kid once” is very true. Don’t work all summer long and forget to have fun. Life is all about balance and that’s a good skill to learn young. Take a weekend road trip. Go on vacation with your parents. Do a movie night, hang out with your friends, and be a kid while you’re gaining some work experience.

By: Iowa College Access Network

This is Contributed Content. Any opinions, advice, statements, services, offers, or other information contained in Contributed Content are solely those of the respective author(s) or contributor(s) and do not necessarily state or reflect the opinion of Iowa Student Loan and/or this blog. See the “About” page for additional important information about Contributed Content.

Comparing Student Loan Options

You’ve recently determined that your child will need a student loan to help cover the remaining cost of college. You’ve probably also discovered that there are many options to choose from. What might be less obvious is that there are some big differences between those options and many providers make it hard for you to know what those differences are.

Knowing how to spot these differences can help you get the best loan for your situation and potentially avoid thousands of dollars in added costs and fees.

Key Differences:

 

  • Marketing Tactics. Many student loan providers won’t tell you the actual interest rate you will receive until you have invested a significant amount of time and provided the necessary information to apply for their loan. Instead, they advertise using the lowest rate they offer, without explaining that only a small percent of applicants qualify for it.
  • Incomplete information. All private student loan lenders are required by law to provide consumers with the annual percentage rate (APR) of their loan products. The federal government however, does not publish the APR for the widely used PLUS Loan for parents. Instead, they provide the interest rate. By not disclosing the APR, consumers often don’t see the effective rate for the PLUS Loan which is much higher than the advertised interest rate due to an upfront fee charged on PLUS Loans not included in the advertised rate.
What You Can Do:

 

  • Do your homework. Be sure to compare several different options to determine the best fit for your situation. Things to look for include: interest rates, repayment options, terms and any additional charges or fees.
  • Be mindful of advertisements including “rates as low as”. Most applicants don’t qualify for the lowest advertised rate. Instead compare the highest advertised rates. If the lender won’t tell you your rate in advance of applying than the most important benchmark to consider is the highest rate they charge.
  • Know your FICO score before applying. Most lenders of private student loans use this as a key factor in assigning your interest rate and APR. Some lenders will provide their interest rates upfront. If you know your FICO score, this allows you to learn what interest rate or APR you will receive if you qualify for their loan before even starting an application.

By: Steve McCullough
President/CEO
Iowa Student Loan

At Iowa Student Loan, we believe in providing you with as much information as possible upfront, before you even start an application. That’s why we offer a national comparison for students and families interested in our Partnership Advance Education Loan®.

Making the Leap: Financially Preparing for College Life

The first year of college may bring a lot of new experiences, and for many, this includes the need to budget a limited income for the first time. Earnings from a summer job can provide financial help for the school year as well as the opportunity to learn how to be financially independent.

Follow these five steps to make the most of the opportunity this summer.

1. Take time to really understand the financial aid package. Make sure you have a good idea of expected aid and how much college will cost for the student as well as the parents or other financial supporters.

  • Each college provides set costs for tuition, fees, room and board, and expected expenditures like books and transportation.
  • In addition, families often face additional expenses that either add up over time or weren’t expected.
  • How much awarded financial aid is gift aid? Grants and scholarships do not need to be paid back and fall into this category. Be aware, though, that many awards are one-time gifts and are not renewable for future years.
  • Is work-study reliable? Work-study awards are dependent on the student finding a qualified position and receiving the wage and hours required to total the award. Check the college’s website for a job board or financial aid section to gather information. Social media can also provide insight on whether students are able to find adequate work-study jobs.
  • Remember that loans must be paid back, with interest. It may help to calculate an expected monthly payment for anticipated college loans and compare that to average monthly payments for a car, house or other major expenses.

2. Track spending. Keeping track of purchases for a week or a month helps indicate where and on what most spending occurs.

  • Apps like Mint and tools like banking or card statements can be helpful.
  • A pattern of where spending can be cut or reduced may start to become clear.

3. Set up a basic budget. Budgets compare income and other funds to monthly expenses to keep consumers from spending more money than they have.

  • Take into account taxes and other deductions that will be removed from gross earnings. A site like PaycheckCity can help estimate these.
  • Divide up expenses into general categories based on typical spending.
  • Consider how spending will change once the academic term begins.

4. Plan out a monthly budget. Use realistic numbers to calculate an in-school budget.

  • Don’t forget that earnings will need to cover expenses for the remainder of the summer plus the entire academic year, unless the student also works while taking classes.
  • If a school-year job with the desired hours or pay doesn’t happen, or if it’s necessary to reduce hours to concentrate on schoolwork, each dollar may have to go further.
  • If parents are contributing to expenses, how will that happen? Options include a one-time gift intended to last through the school year, a monthly deposit into a checking account, a shared credit card account for certain purchases, or another method.

5. Evaluate the results. Adjustments may be required, based on the initial budget and events that occur later.

By: Iowa Student Loan

Building Good Credit as a Student

Credit is a tool and, similar to wielding many other types of tools, using credit can have both positive and negative results. Using credit positively can help young adults build a history that may enable them to get better terms for future credit, such as car or home loans.

Federal regulations limit the amount of credit available to teens and young adults. But, it’s difficult to qualify for loans or other consumer credit without a credit history. Here are some tips for students who want to ensure they’re building good credit.

Opt for a student card. Many national credit card companies offer a student credit card for college students, or those soon to be in college. These cards often carry more lenient requirements and low annual fees, and they may offer incentives for certain actions. For example, you may qualify for cash back for achieving certain grades or discounts on purchases.

Don’t go it alone. Work with your parents to become an authorized user on an existing credit account, like a credit card. This means you have a card with your name on it, but the account holder is still responsible for paying the bills. Be sure you understand the card issuer’s policy for reporting credit for authorized users.

Alternatively, look into credit cards that will allow a cosigner. A cosigner would be responsible for any debt if you don’t pay your own bills, so parents or other close relatives are generally the best people to ask. The cosigner must also have good enough credit to qualify on his or her own.

Create a solid work history. A steady record of income from employment indicates that you‘re more likely to repay debt over time. Generally, you need to demonstrate full-time or near-full-time employment to qualify for a credit card or other credit before the age of 21.

Make a deposit. A secured credit card allows you to make a deposit to secure a line of credit. Even if the deposit must be equal to the credit limit, using the card instead of cash and then making regular on-time payments will build credit. Some credit card issuers may offer an unsecured credit card after you demonstrate good use for a period of time.

Take on bill paying. If you share housing with other students, consider holding a lease or utility in your name. This means you will be responsible for collecting your roommates’ share of the bill each month and making the full payment from your checking or savings account. Demonstrating your ability to pay bills on time each month will help build a positive credit history.

Pay early and pay often. Once you qualify for a credit card or other consumer loan, be sure to make payments. Although you may be required to make only a minimum payment, it’s better to pay a credit card balance in full each month to minimize interest. Making more than the interest payment is also a good idea for other types of loans. To help ensure you can make payments, limit your use and carry a low balance.

Check your results. As you build credit, monitor your credit reports and scores for errors and signs of fraud. Each year, you qualify for free credit reports from the three national consumer reporting agencies from www.annualcreditreport.com. (Never pay for a credit report.)

Educate yourself. The Consumer Financial Protection Bureau (CFPB) provides resources to learn more about credit reports and scores, building credit and what to do if you suspect fraud or identity theft.

By: Iowa Student Loan