The Center for College Planning (CCP) at the NHHEAF Network Organizations is dedicated to providing students and families with valuable information about the college planning process. Below you’ll find articles, links and resources especially relevant for students managing money.
Think of a credit report as a financial report card.
A credit report evaluates your financial history. It compiles your historical payment information from your current creditors – including banks (car payments, mortgages), utilities, credit cards, and cell phone providers – into information used by possible creditors to determine whether they will extend credit to you, as well as at what interest rate and for any associated fees.
A credit report contains the following information:
There are three national consumer credit bureaus – Equifax, Experian, and TransUnion. You will have a credit report with each bureau.
Log onto www.annualcreditreport.com or call 877.322.8228. Federal law requires the major nationwide consumer reporting companies to give you a free copy of your credit report each year if you ask for it. You may also request your credit report in writing by contacting: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. Free credit reports requested online can be immediately viewed online, while reports requested by phone or mail will be processed within 10 to 15 days of receiving your request.
There are two prime reasons you should check your credit report:
Contact the appropriate credit bureau immediately to report the incorrect information, and also contact the creditor that has listed the incorrect information. Keep accurate notes on your efforts to have this information corrected.
Are you trying to build credit for the first time, or perhaps re-build your credit standing after going through some financial difficulties? The only way to build a credit history is to use credit. The key to building good credit is to use credit wisely. Whenever you submit an application for a loan, insurance or credit card, new information is added to your credit report. If you have little or no credit history, you can build credit responsibly over time. Your credit score, a three-digit number that indicates a borrower's ability to repay a loan, indicates to a lender or creditor the level of risk it will have to accept. It quantifies your credit risk. Credit scores are based on detail from your credit reports. Creditors will use your credit history to reject or accept a loan, or may determine the loan interest rate. The higher your score, the less risk for the company offering you credit.
Individuals who feel that their credit score is incorrect should look for inaccuracies in their credit report. You can correct erroneous information in a credit report that results from misinformation or identity theft by disputing your credit report.
Of course, to look for inaccuracies, you need to understand how to read a credit report. One of the three major credit reporting agencies, TransUnion, offers a Credit Report Training Guide. The guide includes a sample credit report with generic information to illustrate the information, messages and summary you will find on your own report.
Identifying Information: This section will contain the consumer’s general information such as name, address past and current, and telephone numbers. You may also find names of employers and the driving license located in this section. It is important for consumers to read this section over carefully and make sure all information is accurate. There may be some discrepancies such as a misspelling of the consumer’s name or a wrong telephone number, such mistakes are fine and to be expected even yet consumers will want to call the agency and report the mistake.
Credit History: A portion of the report will contain the bulk of the information that potential lenders, employers, and others that require a credit report will look at to determine if the consumer represents a high risk or is eligible for whatever benefit or job they are applying for. This section will include the name of the creditor along with the account number. It is possible that the consumer will have multiple account numbers from one creditor. Other information will include the date the account was opened, the kind of credit, along with the total amount of the loan, and how much is still owned on the loans.
Public Records: IF you have any financial data such as tax liens and bankruptcies, this is where you will see it appear. If there is a mistake in this section, you should immediately contact the collection agency listed and inquire about the mistake. It could simply belong to someone with a similar social security number or name or can be a sign of identity theft.
Credit Summary: The last section lists the names of the companies who have requested to see your report and information.
Like a credit report, a FICO score helps creditors determine your creditworthiness. In most cases, in order for a score to be calculated, you must have at least one account that has been open for six months or more and at least one account that has been updated within the past six months.
In the 1980’s, Fair Isaac and Company developed a standardized approach to credit-scoring, known today as a FICO score. A FICO score is a three-digit credit score, ranging from 300 to 850, that helps a creditor evaluate your credit risk - the higher your score, the better risk the creditor considers you to be.
A FICO score incorporates five components of your credit history:
If you have recently applied for some form of credit (i.e., a car loan, a credit card, a student loan), ask the creditor for a copy of your FICO score. You may also purchase your FICO score by visiting myfico.com. Myfico.com also lists additional credit score facts here.
As you begin to build your credit history, it is important to remember that how you manage credit today will impact your life in many ways for years to come. Your credit history will determine whether you will get a student loan, a car loan, or are able to rent an apartment or buy a home – and will determine the interest rates and fees you will be charged for the loan. It may even determine if you get the job of your dreams.
After receiving more than one thousand comments from consumers, consumer reporting agencies, consumer report resellers, business and trade organizations, state attorneys general, consumer advocates, law firms, members of Congress, and academics, the Federal Trade Commission issued a rule in April 2010 to prevent deceptive marketing of “free” credit reports. Specifically, the Act requires that certain advertisements for free credit reports include prominent disclosures designed to prevent consumers from confusing these free offers with the federally mandated free annual credit reports.
Steer clear of deceptive offers – which often require consumers to spend money on credit monitoring or other products or services. The no-strings-attached credit reports are available at www.AnnualCreditReport.com, or by calling 877.322.8228.
Not sure if an offer is legit? The Federal Trade Commission’s Free Credit Reports Rule will require new prominent disclosures. For example, any website offering free credit reports must include a disclosure, across the top of each page that mentions free credit reports, which states:
THIS NOTICE IS REQUIRED BY LAW. Read more at FTC.GOV.
You have the right to a free credit report from AnnualCreditReport.com or 877.322.8228, the ONLY authorized source under federal law. Information in credit reports may affect whether consumers can get a loan or a job, so it is important that consumers check their credit reports and correct any information that is inaccurate. Each of the nationwide credit reporting companies is required to provide consumers with a free copy of their credit reports once every 12 months upon request.
Today college students not only purchase their needed textbooks, they may rent a physical textbook, or they may rent an e-book for the semester. You may want to consider the course you are purchasing the book for; is it an introductory course in your field of study? If so, you may want to keep this book after the semester for future reference. Is this a book for a non-major class? If so, renting (either a physical textbook or an e-book) may be the best option. Consider your own personal preference or study habits to know which options will allow you the most comfort when studying.
But, whatever option you choose, just remember, you only purchase books one semester at a time. If you try one option and it doesn’t feel right for you, you can choose something different the next semester.
ASAP! The most important thing to remember when purchasing your books is to do it in a timely fashion. Professors will expect you to be prepared on day one of class and will most likely have a reading assignment due by the second class. Don’t fall behind in your classes because you are waiting on buying your books or because you waited too long and the book store is out. You can go to the university website or book store and get a print out of all the books that your professor has chosen for your class. Do not feel pressured to purchase your books at your campus store. They may turn out to be the best price, but do your research to be sure. You will need the following info: book title, author, edition, and the unique ISBN number. You can then use websites like Amazon, Chegg, Half.com, CampusBooks, and DealOz to search options and compare prices.
For the 2015-2016 academic year, College Board reports the average cost for books and supplies to be $1,225. Broken down, that can run students $600 a semester, regardless of whether you have chosen to attend a pricier private school, a public college or community college.
In addition to textbooks, typical school supplies include printed class materials, reference books, online subscriptions to journals or newspapers, and the usual office supplies (such as pens, pencils, folders, and notebooks).
Today, there are many different options for how students can purchase books for classes. The options are not all created equal and carry all different price points. You may be hearing a lot about E-books, renting, buying used, and how these options can save you money, well, let’s break it down.
It's almost the end of another term and time for students to think about what they'll do with those pricey textbooks. Unfortunately, many students will be unhappy to learn that the value of their textbook has depreciated significantly during the term, or is not eligible for buyback. The National Association of College Stores offers some answers to students' most frequently asked questions about textbook buyback:
The value of a used book depends on whether or not that particular book has been assigned by a professor for the following term. If the bookstore has received an order from the professor for the book, the bookstore will generally buy back used copies in good condition for about 50% of the retail price. If the book has not been assigned on campus for the next term, the bookstore will check with wholesale companies to determine the national market value - often a much smaller percentage of the original retail price.
Timing plays a huge role in students getting the best prices during buyback. A late book order from an instructor can negatively impact the value of a book. Also, the national market value for a particular book fluctuates based on the changing supply and demand for that book nationwide.
Stores and wholesalers typically don't buy back books once their quota is reached. But there are other reasons why your book may not be bought back as well: it's possible your textbook is not being used anywhere next term, particularly if it is highly specialized or customized; the publisher may be replacing the book with a new, updated edition next term; the book may be part of a required package of items that cannot be sold separately; or, your copy may not be salable due to its poor condition.
College stores provide used books as a less expensive alternative for students, generally pricing them 25% less than new books. Because providing used books is a labor intensive process that creates additional costs for stores, paying more for them at buyback would raise the retail price of the book when it is resold.
Stores must add an amount to the price of all merchandise - including used books - to help cover normal operating expenses. These include: staff wages and benefits; mortgage or rent payments; utilities; insurance and taxes; checkout systems; shelving; security; cleaning and repairs; supplies; and other expenses.
As the term ends, you may consider selling your used books back to an online bookseller, or listing them for sale on an online book exchange. If so, there are several things you should be aware of. The National Association of College Stores cautions students to carefully read buyback websites' FAQs for selling back books beforehand. The fine print may have some specifications and restrictions, including:
Headquartered in Oberlin, Ohio, the National Association of College Stores (NACS) is the professional trade association representing the $11 billion collegiate retailing industry. NACS represents more than 3,100 collegiate retailers and about 1,100 associate members who supply books and other products to college stores. NACS member stores daily serve the majority of America's 17.5 million college students while supporting the academic missions of higher education institutions everywhere. Additional information on NACS can be found online at www.nacs.org.
It is important to have a bank account so that you can effectively save and use money for important life endeavors (like college!) now and in your future. Saving is a key principle. People who make a habit of saving regularly, even saving small amounts, are well on their way to success. It’s important to open a bank or credit union account so it will be simple and easy for you to save regularly. Then, use your savings to plan for life events and to be ready for unplanned or emergency needs.
It's important to have a banking product to handle everyday financial needs that range from making payments to getting paid. There also is no shortage of options — from different kinds of checking accounts to products such as prepaid cards that, at first glance, may seem like convenient alternatives to bank accounts but may lack the federal protections for insured accounts. How can you choose what's best for you?
FDIC Consumer News has developed a 10-question self-test to help you focus on what you want most in a bank account, plus additional tips to help you narrow your choices and make a good decision. Ready to get started?
How do I want to deposit money into an account? If you're not already having your payroll, pension, Social Security payments, unemployment benefits or other income directly deposited into your bank account, look into it. Direct deposit may save you money on fees, plus you will receive the payment more quickly than depositing it in person.
For checks that you need to deposit into your account, consider how you'd prefer to do that (in person, electronically, by mail) and if a bank you're looking at would be a good choice. For example, you might be interested in depositing checks using a smartphone, but not all banks offer that service. Or, if you like to make deposits at a teller window, find out the hours you can do so.
How do I plan to pay bills or purchase goods? More people are using debit cards instead of writing checks to draw money from their checking account, in part because of the convenience and speed. The FDIC recently conducted a pilot program at nine institutions offering electronic, card-based accounts and found that "checkless checking" can reduce the risk of overdrawing accounts.
If you want to pay bills online, explore what the bank offers and whether there are any fees. “The potential benefits of online bill-paying services include a confirmation that you paid the bill, and with some institutions, a guarantee that any payment you originate will be delivered on a set day,” noted Luke W. Reynolds, Acting Associate Director of the FDIC's Division of Depositor and Consumer Protection. “Some banks' bill-payment services will even electronically deliver your bills from certain companies you do business with, which can save you time and hassles.” These online programs vary, he said, so check on any limitations, such as on what bills can be paid through the service.
Also, if you'd like to electronically pay other people (as opposed to companies), find out about your options. They may include payment by phone, computer or smartphone. Again, ask about any limitations and fees.
Do I want to monitor my account electronically? Telephone and online access to accounts is increasingly becoming the norm. But if you want to monitor your account activity and balance using a smartphone or tablet computer, find out whether these features are available.
Electronic alerts from your bank can save you money. Options may include text or e-mail messages if your account balance reaches a threshold you set (say $10), so you can curtail spending or add funds to avoid overdraft fees.
What are my options for withdrawing cash? Find out if the bank has branches or fee-free ATMs you can use close to where you think you need them, perhaps near your home or work.
You also may be able to get cash from your account when you make a purchase with a debit card at certain merchants, but this can lead to unnecessary expenditures.
Are there features that can help me put more money into savings? Many consumers find that setting their savings on auto-pilot — by automatically transferring money into a savings account on paydays or at other regular intervals — is the easiest way to build a rainy-day fund or achieve other savings goals. “Paying yourself first is the most effective way to ensure that you set money aside because, as the saying goes, ‘What you don't see you probably won't spend,’” noted Lekeshia Frasure, Acting Chief of the FDIC's Outreach and Program Development Section.
What will the new account cost? Pay careful attention to how much money you may need to open and maintain the account. For example, what does the bank charge for falling below the minimum balance requirement?
By now you should have a better idea of the features you want in a bank account and how much they're likely to cost. Here are other questions to ask before you make a final decision:
Have I compared several institutions? Look at each bank's disclosure of fees and key terms. The types of fees may vary considerably from bank to bank. Also compare the products and features a bank offers on its Web site to what you are told in person; it's possible that a special offer may be available through certain branches only and not online, or vice versa.
By comparison shopping based on the fees and how you expect to use your account, you should be able to predict what each account will cost you.
Am I giving too much consideration to "rewards" or other special offers? “One-time deals, whether they involve cash or merchandise, can induce consumers to select an account that isn't necessarily the most cost-effective,” said Reynolds. “Likewise, with specials that won't last the life of the account, such as an interest rate bonus that will only last a few months, compare the regular terms and conditions of the account to what the competition is offering to decide if the account is right for you for the years ahead.”
Also carefully evaluate the requirements to qualify for any special offer and determine if that is consistent with how you already manage your finances. For example, if you expect to use a debit card infrequently, don't sign up for an account that offers a special interest rate that is conditioned on making a dozen or more debit card transactions per month.
Frasure also warned to be especially cautious when the reward is based on making purchases. “Don't let down your guard against unnecessary spending in order to earn rewards,” she said. “If you are spending more than you would at another bank, those ‘free’ rewards may end up costing more than you think.”
Will all my deposits be federally insured? This is important to know before opening an account or making a sizable deposit in the future. The FDIC guarantees deposits up to at least $250,000 per depositor per institution, including principal and accrued interest, if the bank fails. If you have less than $250,000 in a bank account, you can rest easy knowing that no depositor has lost a penny of insured funds since the FDIC's creation in 1933.
For help or information regarding FDIC insurance coverage, call the FDIC toll-free at 1-877 ASK-FDIC (1.877.275.3342) or visit www.fdic.gov/deposit/deposits.
If I'm thinking about using a prepaid card to pay for purchases, is it the case that they may have fewer consumer protections than a traditional bank account? Generally, bank checking accounts, including any cards linked to an account, are covered by comprehensive consumer protection laws that, for example, limit how long a bank may hold a deposit before making funds available or offer protections in the event of fraudulent activity.
However, some people have turned to prepaid cards that are reloadable and can be used for general purposes (such as at merchants and ATMs) as alternatives to checking accounts without realizing there may be hidden fees and fewer consumer protections.
“For these reasons and others, often including the inability to easily set aside money in a separate savings account, most prepaid cards cannot offer the features of a well-selected, well-managed bank checking account,” said Reynolds. To learn more about prepaid cards, see Debit, Credit and Prepaid Cards: There Are Differences.
Once your account is open, remember the following.
Overdrafts pose the largest risk for costly fees, but you can avoid them. The easiest way to avoid these fees is to keep an up-to-date record of how much money is in your account and check your balance before making a purchase or writing a check. Also, ensure that you have sufficient funds in the account to cover any bills automatically paid from the account.
“Mistakes — overdrafts — can happen, so understand how you can deal with the consequences in the most cost-effective way possible,” said Frasure. For overdrafts caused by debit card transactions, she explained, if you do not “opt in” (agree) to a fee-based overdraft program from your bank, “debit card transactions that exceed the available funds in the account would generally be declined, but at least you would not pay a costly fee for spending money not in your account.”
An effective way to handle overdrafts may include pre-arranging for an automatic transfer from your savings account to your checking account when the balance falls to zero.
You can control whether financial companies share your information for marketing purposes with certain other companies. The privacy of your personal financial records with a financial institution is protected by law. If your financial institution intends to share your information with anyone outside its corporate family, it generally must give you the chance to “opt out” or say “no” to information sharing under certain circumstances. Consult the privacy notice of the institution for details.
You may choose to switch from paper statements to electronic statements. If you do so, be sure to immediately review your electronic statement because timely reporting of errors is essential to limiting your liability in the event of a problem. Also, if you ever need to confirm that you paid a bill, consider saving a copy of each monthly statement in a secure, perhaps electronic location, especially if the institution charges a fee for retrieving previous statements. For more information, see Going Paperless with Electronic Statements.
It's important to monitor communications from your bank about changes it plans to make to your account, including new fees. “These notices can prompt you to reevaluate whether you can get a better deal by shopping around,” Reynolds said.
The FDIC has resources that can answer questions about bank accounts and your consumer rights. Start at www.fdic.gov/quicklinks/consumers.html or call toll-free 1.877.ASK.FDIC (1.877.275.3342). You can also e-mail us using the Customer Assistance Form at www2.fdic.gov/starsmail or send a letter to the FDIC, Division of Depositor and Consumer Protection, 550 17th Street, NW, Washington, DC 20429-9990.
Other federal, state and local government agencies also publish consumer information and have staff, Web sites and other resources that can help answer questions on bank accounts. Start at www.mymoney.gov, the federal government's one-stop resource for personal financial information.
Skilled identity thieves use a variety of methods to steal your personal information, including:
Deter identity thieves by safeguarding your information:
Detect suspicious activity by routinely monitoring your financial accounts and billing statements:
Defend against ID theft as soon as you suspect it.
More students have credit cards than ever before. However, most students do not understand the terms of the credit cards they carry. What's more, students are going into debt on their credit cards. Easy access to funds to buy what you want when you want can be a huge temptation. But take it from many students who didn't use credit wisely, "when you're a student, live like a student so that when you graduate you won't have to”.
ATM - Allows you bank any time of the day and on weekends. You can make deposits, withdrawals, and transfer between accounts. Keep in mind that some banks may charge you a fee for using their ATM machine. To avoid a fee, get a list of banks within your network.
Debit - Acts as an ATM card and allows you to use it to make purchases right out of your checking or savings account, just like writing a check. Keep in mind that some stores can charge you a fee to use your debit card. Also, unlike a credit card, the money is withdrawn from your account immediately.
Credit - The good news is credit cards are accepted just about everywhere. Unlike ATM and Debit cards, your credit card allows you to borrow money to pay for things and you pay your credit card company later. As a consumer, you are allowed to pay your card off in full, or only make a partial or minimum payment monthly. Keep in mind that if you do not have the money to pay off your card when you get the bill, you will be charged interest (also called a finance charge) and the items you purchased will end up costing more then what you paid. In addition, if you cannot pay the minimum payment monthly or you do not pay the bill at all, it will negatively affect your credit.
The Credit Card Accountability, Responsibility, and Disclosure (CARD) law took effect in February 2010 and it significantly changes credit card availability for those under the age of 21 in an effort to protect students from getting into debt by either requiring a $500 credit limit or a limit that is 20% of your annual income. A co-signer may be required.
Before you get a credit card, be a good consumer and investigate your options, especially relative to interest rates and annual fees. Determine what the interest rate will be if you are not able to pay in full for your purchases each month. Is it fixed or variable? Keep in mind that some credit card companies have one interest rate for the first year and hike that rate up when the first year is over. Also, if you are hoping to transfer balances from another credit card(s) in hopes of consolidating your cards, be sure to verify that the interest rate on balance transfers is not significantly higher than the one for current purchases. Finally, some credit card companies charge an annual fee to use their card. Often, these cards have other benefits that are attractive, like airline miles or cash back. Determine if you will use the card enough to warrant paying for that cards use.
Responsible use of credit will help you achieve various financial goals throughout your life such as applying for a college loan, buying a car, and securing a mortgage. If you have misused credit, it will undoubtedly affect your FICO score and will appear on your credit report for up to seven years. Begin to repair your credit by developing a spending strategy and starting to pay off your debts as quickly as possible. As you pay off your debts, your credit rating will begin to improve. Some suggestions to repair your credit are:
One of the biggest challenges for most prospective graduate students is the thought of managing undergraduate loans. Good news! Most loan programs have provisions allowing students to postpone payment during enrollment in a degree program. Check with your loan servicer for more details about options available to you.
While enrolled in a graduate program, you may be eligible to postpone your payments on undergraduate loans through deferment or forbearance. There are many types of deferment depending on your situation. If you do not qualify for a deferment, you might be eligible for a forbearance which is a temporary postponement of payment of your principal and interest due to financial hardship.
If you work in certain fields, there are programs that will forgive all or some of your federal student loans. Public Service Loan Forgiveness is a new program that will forgive any remaining student loan debt after 10 years for eligible people who work in qualifying public service positions. Other loan forgiveness programs are available for teachers, nurses, or AmeriCorps and PeaceCorps volunteers.Talk with your student loan servicer(s) or visit www.studentaid.ed.gov for more information.
You really can learn so much from your first job. But keep in mind that your first responsibility is to your health, well-being and education. There are Federal and State rules regarding young workers’ hours and options for work. According to the Department of Labor, the intent of the rules in addition to student safety is to “strike a balance between ensuring sufficient time for educational opportunities and allowing appropriate work experiences”.
If you are 14 or 15, you can work . . .
You can work no more than…
If you are 16 or older, you can work . . .
When You Are 13 or Younger . . .
When You Turn 14 . . .
When You Turn 16 . . .
When You Turn 18 . . .
Watch our series of Financially Fit in 15 videos featuring personal finance management expert, Rich, discussing a wide variety of finance topics including: