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ALGEBRA I/COLLEGE DEBT PROJECT

College Debt Project Tables
DAY ONE /// INTRODUCTION TO DEBT
Student loan debt has exploded in the last 20 years as demand for a college education has grown, prices have risen, and more federal and state money has been allocated to loan programs. Despite possessing college degrees, many of these graduates have struggled to find jobs and now face a serious problem as young adults – mountains of debt they will struggle to pay off in the following DECADES.
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Piles of debt can have severe negative consequences on relationships, health, and lifestyle. The good news is that you have the ability to take positive steps now that will prevent future headaches… and it all starts with the decisions you are making now about college.

 

This lesson will provide you with the tools to make wise decisions relating to college choice, degree programs, loans, and your career.

Before you choose a career path, write down the following questions on a sheet of paper and answer them honestly:

  • What are your academic strengths (in which classes do you excel or which classes do you most enjoy)?

  • Can you see yourself working in a profession related to that subject area?

  • What activities or extracurriculars do you enjoy outside of the normal school day?

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Look over the Excel document and the list of occupations inside of it, and choose a career that you think you could enjoy doing for about 50 years.

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List of Professions
DAY TWO /// COLLEGES AND MAJORS

  • Find the education requirements of the job you chose, then go to the ACT website and find a major that is related to your career choice.

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And although it may sound like common sense, understand that different majors and careers have different earnings abilities. You may really enjoy Art History, but there are only a few jobs on the market that pay well for Art History majors. On the other hand, engineers are almost guaranteed to make good money throughout their careers.

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Read the article from 538.com to learn about earnings potential.

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DAY THREE /// PAYING YOUR LOANS

Choose a public and a private university that offer your needed major, then go to CollegeBoard.org and look up the cost-of-attendance information for both schools. Calculate the cost-of-attendance over four years and fill that information in on your worksheet. You will also need to go to Pasco-Hernando State College's website and find the cost to attend PHSC for two years. You'll then add two years of attendance at the public university to find the four-year cost of an education split between the lower cost community college and the medium cost of a public university.

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Assume that you will not receive any athletic or academic scholarships, but instead you will have to pay for college with only loans. Calculate the cost of loans for the full four years at fixed rates of 3%, 8%, and today’s current rates. Determine the monthly payment if your loan term is 12 payments per year for 10 years, 20 years, and 30 years. Open your Excel document and go to the second sheet titled “Loan Amortization Schedule.” If you only have the Excel viewer go to http://www.amortization-calc.com.

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Loan Amortization Table
DAY FOUR /// BUDGETING (TO PAY YOUR LOANS)

One of the most important things a young adult can do to manage their money responsibly is to put together a budget to know where their income is going each month.

 

Get together in groups of 2-3 and take ten minutes to make a list of as many things as you can think of that you will be responsible for paying for as an adult. We’ll then compare your lists against my list.

 

Find the starting salary for your chosen career. Use this starting salary as a basis for a monthly budget, taking into consideration everything you will have to pay for as an adult. Use Atlanta, Georgia for the city you will live in once you have graduated from college. You will enter this amount on the top row in the second column, then divide that number by 12 to find your monthly gross income. Next you will calculate the taxes and household expenses for which you have been given percentages. These percentages will be taken from your original gross income. After you have calculated these and put them in the column to the right, estimate what your expenses would be for the rest of the budget.

 

Near the bottom, you are going go back to assignment three and find the monthly payment at the current interest on your student loan for the school you think you would be most likely to attend.

 

When you have finished your budget, did you have money left over or were you short on money at the end of the month?

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DAY FIVE /// WHAT DID YOU LEARN?

Answer the following questions in full paragraphs:

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  • Can you live off of the salary of your chosen career, with the lifestyle you want, and the debt you have accrued from college?

  • What should you stop paying for (as in stop using a good or service) if you find that your monthly expenses are greater than your income? What can you NOT stop paying?

  • How would living in a different city or outside of the center of a city change your costs/income?

  • What can help offset some of these futures debts?

  • Why is it important to do everything you can to start your adult life without debt?

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