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GREAT ADVICE FOR COLLEGE STUDENTS 2024

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Welcome to Great Advice for College Students!

Navigating college involves navigating more than just classes and campus life. Fun or not, managing your money is crucial to your today and tomorrow. In this issue of Great Advice, we’re diving into timely choices, trending strategies, helpful tips and closing with one of many reasons getting your finance game on is so important. Each topic is designed to empower you with the practical knowledge and tools to manage your finances while enjoying your college years. Read! Share! Save as your own tools for success!

What College Students Need to Know About Payment Apps Payment apps are popular and convenient, but understanding their security features and fees is vital. Learn how to use these apps safely and effectively. 4 Ways to Turn the ‘Loud Budgeting’ Trend Into a Habit Budgeting can be fun and visible with the ‘Loud Budgeting’ trend. We’ll show you how to make budgeting a regular part of your routine to stay on track financially. Federal Student Loan Interest Rates Will Hit Some Record Highs Stay informed about rising federal student loan interest rates. We’ll explain what this means for you and how to manage your education funding effectively. How to Pick a College Bank Account as Carefully as You Pick a College Choosing the right bank account can greatly impact your finances. We’ll guide you through finding an account that suits your needs, minimizes fees, and offers convenience.

What College Students Need to Know About Payment Apps KIMBERLY PALMER

For college students, sending money to friends has never been easier thanks to peer-to-peer payment apps like Venmo, PayPal and Cash App. But that convenience poses risks, including vulnerability to errors, fraud and the tendency to overspend. As a result, payment apps can contribute to financial stress at a time when young people are learning how to manage their finances on their own. “Peer-to-peer payment apps are cash on steroids because they’re a straw stuck into your bank account,” says Anne Lester, author of “Your Best Financial Life.” Not only does that make spending easier and more “frictionless,” Lester explains, but it also means “if you trust the wrong person, then you’re in big trouble,” because it can be difficult or impossible to get the money back. To keep young people safe while using payment apps, money experts suggest taking these extra steps to guard against scams and overspending. Triple-check the recipient One risk with peer-to-peer payment apps is sending the money to the wrong person by accident. “If you send money, make sure you are 100% certain you are sending it to the right person, because it’s very hard to get the money back,” says Nilton Porto, associate professor tof consumer finance at the University of Rhode Island.

For college students living on tight budgets, Porto says, an incorrect payment could really impact their ability to pay for essentials like rent and food, even if they eventually get the funds returned.

Protect against fraud Porto suggests being wary of unexpected requests, even those purportedly from a roommate, that claim to be urgent. “We don’t need to send money to almost anybody right away,” he says, explaining that scam artists often use urgency as a way to trick people into sending cash to them. Similarly, disregard any requests received through one of the apps containing a link that requests personal information, as it could also be a scam. Erin Lowry, author of the “Broke Millennial Workbook,” warns against downloading any unfamiliar payment apps. “I would not be an early adopter to a payment app,” she cautions, given that it has access to your bank account. As an additional precaution, Lowry suggests connecting payment apps to a bank account that you don’t keep the bulk of your money in. “My payment apps are connected to a bank account that’s not my primary account, so if something were to happen, it’s a low risk,” she says. Update your privacy settings “Default privacy settings are usually public,” notes Amanda Christensen, an accredited financial counselor and extension professor at Utah State University. That means a young adult’s payments to friends or funds received for a job could be visible to the public. “The social part of the payment apps is where we get some of the best scammers out there because they can see what’s being regularly paid for,” Christensen says. To adjust who can see your activity in Venmo, for example, go into “settings” on the app and scroll to find the various “privacy” options, such as public, friends or private. Earn a return elsewhere Christensen suggests establishing a habit of transferring any balance out of payment apps once a week. “Set a note in your phone,” she says, cautioning against treating the app like a checking account, where you let money sit. Not only is cash sitting in an app vulnerable to fraud, but it also doesn’t earn a return like it could in a savings account. Jake Cousineau, author of “How to Adult” and a high school teacher, says he sees many young people receiving payments for side jobs like tutoring through payment apps. Instead of quickly transferring the money into a savings account, they let it linger, which means losing out on interest that would otherwise be accumulating. Payment apps also generally lack the protections from the Federal Deposit Insurance Corp. that come with bank accounts, he adds. Don’t forget to budget The convenience of payment apps makes it easy to overspend, Christensen notes. That’s why she suggests turning to cash at times for a week or so. “Reconnect yourself to the pain of spending,” she says.

Cousineau recommends not letting “these apps get in the way of having a detailed budget.” Just because you can easily send a friend $20 with a few taps doesn’t mean you should. The apps might even be able to help. Porto says you can use the timeline of a payment app to help track your spending. Just as with a credit or debit card, you can scroll through your history to determine what changes you might want to make in the future. “You can see where all the money went, which can be very powerful for college students,” he says. In other words, leverage the power of these payment apps to help you manage your money, instead of just spending it.

The article What College Students Need to Know About Payment Apps was written for NerdWallet on April, 2024.

KIMBERLY PALMER is a writer at NerdWallet.

4 Ways to Turn the ‘Loud Budgeting’ Trend Into a Habit TIFFANY CURTIS Setting financial boundaries isn’t a new concept, but there’s a new name for it. “Loud budgeting” is a viral money trend that’s encouraging people to be more open about their finances. TikTok content creator Lukas Battle is credited with popularizing the term. In one cheeky video, Battle gives an example of loud budgeting: Saying “Sorry, can’t go out to dinner, I’ve got $7 a day to live on.” And while Battle’s example might be funny, practicing financial transparency is resonating with many people who are feeling financial strain. What is loud budgeting? This approach is about looping others into your financial goals and combating money shame. “This means making better spending decisions that support your goals, and being honest with friends and family about why you are opting out of gatherings that require you to spend, such as going out to dinner or going away for a weekend trip,” Andrea Woroch said in an email. Woroch is a personal finance writer and consumer savings expert who has appeared on “Good Morning America” and other TV news shows. It’s also about aligning how you spend your money with the goals you want to achieve, which can be empowering. You can say, “I don’t value this enough to spend money on this because I’m saving money for a down payment, or … I’d rather not spend money on this because I’m saving for a vacation,” Giovanna “Gigi” Gonzalez says. “It gives you the power back, and it shows that you have clarity on your financial goals.” Gonzalez is the author of the personal finance book “Cultura & Cash” and a TikTok content creator.

Loud budgeting can help you save more, find support Strengthening your boundary-setting and communication skills, and holding yourself accountable, can help you save more money to put toward your goals. “Having money goals is something to be proud of and something that you should really communicate to your friends and family, so they know where you stand financially, because when you don’t, people just assume that the money you have is a free-for-all,” Gonzalez said. Being transparent about money may also open up support. “Speaking openly about your finances leads to more candid conversations about money with others who may have gone through a similar struggle, and [who] can offer advice or tips on how they improved their own financial situation,” Woroch said.

How to make this a habit, not a passing trend Some ways to build loud budgeting into a regular habit include: Address your feelings about money 1

The emotions you have tied to money can affect your financial wellness, and how you feel about money can be shaped by your cultural background and other factors, like generational trauma. For example, Gonzalez says, “I think because in my culture, the Latino culture, it’s very much expected that you just provide money … it’s very much seen as an obligation that you have to your elders, for the sacrifices that they put in so that you’re able to now have a better life.” And familial expectations about money can cause conflict and strain your finances. Addressing your feelings about money with a professional like a financial therapist can improve your ability to set money boundaries and communicate them. Get an accountability partner 2

Share your financial goals with someone you trust and who will help to hold you accountable.

“Is there someone else you know who recently proclaimed their loud budgeting efforts on social media or in your circle of friends?” Woroch said. “Reach out to share your goals and support each other by holding each other accountable with monthly check-ins or texts when you’re feeling like spending.” Set clear goals 3

Think about the kind of life you want to live and set money goals accordingly.

When Gonzalez wanted to travel the world, she bought a map and put it where she could see it every day. “But for somebody else, maybe their big dream is to buy their own home,” she says. “So I tell people to keep the motivation and momentum going … make your lock screen [a picture of] your dream home.”

Keep your money goals front and center as you navigate the short-term discomfort that might come with having to say “no” to things that don’t align with them. Show up in other ways 4

You can make loud budgeting a habit and still show up for the people you care about.

Gonzalez suggests finding alternative ways to offer your support. “I’ve had a friend ask me to [co-sign] for his car, and I told him, ‘I love you but that’s a big commitment and I don’t feel comfortable,’” she said. “And I explained to him the reasons why: ‘If you were to default on this, It falls on me or my credit’.” She offered to help her friend research more affordable car options instead. Supporting your loved ones in nonmonetary ways might also look like cooking or cleaning for them, babysitting or helping in their job search.

The article 4 Ways to Turn the ‘Loud Budgeting’ Trend Into a Habit was written for NerdWallet on February, 2024.

TIFFANY CURTIS is a writer at NerdWallet.

Federal Student Loan Interest Rates Will Hit Some Record Highs ELIZA HAVERSTOCK Federal student loan interest rates will reach record heights for the 2024-25 school year, increasing the cost of college for people who will take out student loans, according to a May 14 Education Department announcement. Here’s how 2024-25 federal student loan interest rates will compare to 2023-24 rates:

• Undergraduate direct loans will have a 6.53% interest rate, up from 5.50%. • Graduate and professional direct loans will have an 8.08% interest rate, up from 7.05% • PLUS loans, available to parents and grad students to fill in funding gaps, will have a 9.08% interest rate, up from 8.05%.

Since 2006, all federal student loans have fixed interest rates. Undergraduate direct loan interest rates haven’t been this high in 16 years, since the 2008-09 academic year. (The standing record is 6.8%, for loans disbursed between 2006 and 2008.) Interest rates on direct graduate loans and PLUS loans have never been this high. The upcoming federal interest rate hikes may also affect students already dealing with major FAFSA errors and delays, adding another layer of uncertainty about the true price of college in 2024-25. For some students, private student loans with lower interest rates may look more attractive — but private loans come with fewer borrower protections and no forgiveness options.

Rising rates increase total cost of college Each spring, the government sets federal student loan interest rates for the academic year ahead. The rates are effective July 1 and will apply to all borrowers who take out new federal student loans for the 2024-25 school year. Federal student loans have fixed interest rates, so they won’t change during the repayment period — which typically lasts from 10 to 25 years, depending on your repayment plan. (If you’re already repaying older student loans, this interest rate hike doesn’t affect you.) Ultimately, higher interest rates will make college more expensive for the millions of college students and their families who take out loans. Today, about 43 million people collectively owe $1.6 trillion in outstanding federal student loans — and federal loans account for about 93% of the total debt, per an analysis of Department of Education and Federal Reserve data. That total is poised to grow: 2024 high school graduates heading to college this fall could amass about $37,000 in student loan debt while pursuing their bachelor’s degree, according to a recent NerdWallet analysis. Dependent undergraduate students can take out no more than $31,000 in federal loans, so more students may turn to private loans to fill the gaps. Here’s an example of how the higher interest rates can hit your wallet. If you start college in the fall and borrow $31,000 worth of unsubsidized federal direct loans over the course of your undergraduate education with a 6.53% interest rate, you’ll wind up paying back about $42,315 under a standard 10-year repayment plan. If you’d started college in 2020-21 and taken out the same $31,000 in unsubsidized federal loans with a record-low 2.75% interest rate, you’d have had to repay around $35,510 over 10 years — a $6,805 difference. In practice, you could pay even more. You can’t borrow the full $31,000 at once — the capped amount is split up over the years you’re in school. If you’ll be a college freshman in the fall, interest rates could increase in the three (or more) years to follow.

Run the numbers with a student loan calculator to see how much your debt may cost over time.

Federal vs. private student loan interest rates In recent years, federal student loans have offered lower interest rates than private alternatives — but that may no longer be true for some borrowers. Currently, private student loans for undergraduates have interest rates from 3.85% to 15.9%, according to an April 2024 NerdWallet analysis. To qualify for the lowest rates, borrowers must have a high credit score. Many students will need a parent with excellent credit to co-sign the loan and accept equal legal responsibility for repaying it.

Federal student loans don’t allow co-signers, and only federal PLUS loans require a credit check. Other federal student loan borrower protections not typically offered by private lenders include: • Repayment plans that cap monthly bills at a certain percentage of your income, such as the new SAVE repayment plan. SAVE can forgive smaller amounts of debt in only 10 years, and give borrowers $0 bills if they earn a lower income. • Extended payment pauses, like a student loan deferment or forbearance, for financial hardships. (Private loan forbearances are generally shorter and more difficult to qualify for.)

• Loan forgiveness programs, like Public Service Loan Forgiveness.

• Loan discharges for borrowers whose school closed or defrauded them.

As a general guideline, borrowers should prioritize federal student loans. If they still have remaining costs, private student loans are a good option to fill in the gaps.

Submit the FAFSA to minimize borrowing Minimize your total college debt and interest payments by leaning on funding sources you won’t have to repay, like scholarships, grants and work-study. You must submit the FAFSA for each year you’ll be in school to qualify for most grants and work- study. That includes the federal need-based Pell Grant, which can give you up to $7,395 per year in free money to pay for college. Many scholarships require applicants to submit the FAFSA. You also need to submit the form to be eligible for federal student loans. The new, redesigned FAFSA is open until June 30, 2025, for the 2024-25 school year, but you should fill it out as soon as possible to increase your chances of getting more money — some types of aid draw from limited pools and can run out.

The article Federal Student Loan Interest Rates Will Hit Some Record Highs was written for NerdWallet on July, 2024.

ELIZA HAVERSTOCK is a writer at NerdWallet.

How to Pick a College Bank Account as Carefully as Your College SPENCER TIERNEY

Attending college can get pricey, so you’ll want to avoid costs from other places — like your bank account. More than 668,000 students paid nearly $15.5 million in bank account costs in a year, an average of almost $26 per person, according to a 2022 report by the Consumer Financial Protection Bureau. What’s worse is that some colleges endorse costly bank accounts as part of their partnerships with banks. “Do not assume that because your college or university partners with a bank, that bank is offering you a good deal,” Aaron Klein, senior fellow in economic studies at the Brookings Institution, said in an email. Before heading off to college, consider what factors you need in a college checking account. There’s no grade on this, but the wrong bank can cost you. Decide what features matter Checking accounts work similarly wherever you bank, but some features vary or aren’t available at every bank, including branches, highly rated mobile apps, certain account fees and perks such as direct deposit up to two days early.

Decide a few things going in, like whether you need a bank that offers joint bank accounts to share finances with a parent and whether you’ll want credit cards or other loan options at the same place.

» Learn more: How to choose a bank

The biggest banks generally have robust apps and big branch networks, but their account fees can be high. In contrast, regional banks and credit unions — the not-for-profit counterpart to banks — might have lower fees and more of a community focus, but they have fewer branches and might lag in technology. Online banks can have minimal fees and high-quality apps, but they often lack a branch network and the ability to deposit cash isn’t guaranteed. Nationwide ATM access is usually available at credit unions and online banks through shared networks, but they might not be as easy to spot as big bank ATMs. Just don’t limit your options to only accounts marketed as “college checking.” You might miss out on banking features you’d want. Check for fees Watch out for fees on monthly maintenance, ATM usage and overdrafts. You can often avoid a monthly fee, such as $5 or $10, by having a certain minimum balance or direct deposits into your account — or by finding a checking account without monthly fees. Using an ATM to withdraw cash outside your bank’s network can trigger a fee of around $2 to $3 from your bank, plus a fee from the ATM operator. And overdraft or nonsufficient funds fees can be $30 or more per transaction, which will kick in if a payment drops your account balance below zero. Carla Sanchez-Adams, senior attorney at the National Consumer Law Center, recommends looking into Bank On certified accounts, which don’t have overdraft or NSF fees. Transactions that would bring an account balance below zero get declined instead. Plus, these accounts can have screening practices inclusive of those with less banking history. You might have to pay fees for some services, such as getting a checkbook. “Not every account is going to be completely free,” says David Rothstein, senior principal at Cities for Financial Empowerment Fund, who manages Bank On, CFE Fund’s national platform that promotes financial inclusion.

» More details: What is an overdraft fee?

Factor in account security This year, there have been three bank collapses. While bank failures are rare, federal deposit insurance protects your money. If a bank fails, you get up to $250,000 of your money back. Banks get insured through the Federal Deposit Insurance Corp., and credit unions have the equivalent protection through the National Credit Union Administration. However, it’s more complicated with accounts at newer financial tech firms, such as Chime and Current, as well as with debit cards at firms like Cash App and PayPal’s Venmo. These companies typically partner with banks to provide “pass-through” FDIC insurance in their accounts. But if these companies fail, getting your money isn’t as straightforward as with a bank. This uncertainty is one reason why tech firms’ accounts aren’t eligible to be Bank On accounts.

“It’s true that a lot of the fintechs have a relationship with banks behind the scenes, but that’s never really been tested,” Rothstein says. Beyond FDIC insurance, look for multifactor authentication in banks’ mobile apps to boost account security. Also, confirm that a bank provides monthly statements and spending alerts so you can monitor transactions and flag any that appear fraudulent. Go beyond checking when you’re ready Once you have a checking account for college, consider a savings account for money you won’t need to spend next month. See if your bank offers secured credit cards or credit builder loans, which can be good steps to establishing credit history. Secured credit cards usually require a cash deposit upfront equal to your borrowing amount, while credit builder loans entail making all payments before receiving the full loan amount.

The article How to Pick a College Bank Account as Carefully as Your College was written for NerdWallet on May, 2024.

SPENCER TIERNEY is a writer at NerdWallet.

Inceptia knows money can be confusing if you don’t know where to find the information you need. That’s why we want to help you proactively prepare for and get a handle on student loan repayment — before it even begins! With Inceptia’s money mascot — the Knowl — as a trusty guide, you can use our Student Knowledge Headquarters to find answers, calculators, resource guides and more to prepare for and successfully enter into repayment. Getting started is easy! Head to HeroKnowl.org to explore our free tools and information. GET TO KNOW YOU AND MONEY!

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For more great articles and tips from NerdWallet, including articles, calculators and other resources for student loan repayment, be sure to check out their student loans homepage.

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