Pub. 8 2018-2019 Issue 2

O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S September • October 2018 5 M ost of us look back fondly on our college days – for many, those were the days of seemingly little responsibility, other than attending classes and scoring top marks. I certainly have many great memories, maybe even more than most, having played for two national champion University of Nebraska football teams, those were days of hard work and commitment to achieve exceptional results. Those days seem so long ago – but for some, there are still constant reminders of those carefree days: student loan payments and credit card bills. As thousands of new students are set- tling in at colleges and universities across the country – and the globe – this time of year is particularly ripe to educate them about the appropriate use of credit and how the financial decisions they make today will affect them long into the future. The rising costs of a college education have forced many Americans to take out student loans that leave them saddled with debt for years and even decades after college ends. According to the American Bankers Association, more than 44 million Amer- icans carry an aggregate $1.45 trillion in student debt.While the completion of college is shown to economically benefit everyone, the debt incurred acts as a major financial headwind, delaying Americans from reach- ing life’s big milestones like purchasing a car, buying a home and starting a family. Furthermore, 62 percent of Millennials sur- veyed by American Student Assistance said that they have put off saving for retirement or other investments while dealing with their student debt. While it’s important to understand that the majority of student loans are federal and originate with the Department of Ed- ucation – banks market share of servicing and origination is less than 10 percent – the industry is doing its part to help mitigate the burden of student loan debt in America. Banks are among the 4 percent of employers nationwide that offer student loan repay - ment program benefits. Bankers can share the tips included on this page from the U.S. Department of Edu- cation with their young clients when they’re preparing for higher education. While you’re at it, make sure your young adult clients are well versed in how to use credit wisely over- all. Credit cards are an important financial tool for students, especially those living away fromhome. They provide a flexible and convenient way to pay for books and other essentials, and they provide an important safety net for emergency expenses. As bankers, we recognize that applying for a credit card may be a college student’s first experience with our bank and we want it to be the start of a positive, lifelong relationship. When theyare applying for a credit card,make sure you are connecting themwith any finan - cial literacy tools your bank has to offer. Ad - ditionally, the Colorado Bankers Association has a website to which you can direct them to educate themselves onconsumer credit (www. financialinfo.org ), as well as resources from the ABA (aba.com/consumers ). Keep track of how much you’re bor- rowing. Think about how the amount of your loans will affect your future finances, and how much you can afford to repay. Your student loan payments should be only a small percentage of your salary after you graduate, so it’s important not to borrow more than you need. Research starting salaries in your field. Ask your school for starting salaries of recent graduates in your field of study to get an idea of how much you are likely to earn after you graduate. You can use the U.S. Department of Labor’s Occupation- al Outlook Handbook to estimate salaries for different careers or use a career search tool to research careers and view the average annual salary for each career. Work with your advisors to under- stand the path to the degree you are seeking and look for ways to take only the classes you need. This will help avoid paying for classes that don’t directly contribute to your field and even further reduce the cost of debt you may have otherwise incurred. Understand the terms of your loan and keep copies of your loan docu- ments. When you sign your promis- sory note, you are agreeing to repay the loan according to the terms of the note even if you don’t complete your education, can’t get a job after you complete the program, or you didn’t like the education you received. Make payments on time. You are required to pay the full amount required by your repayment plan, as partial payments do not fulfill your obligation to repay your student loan on time. Find out more about student loan repayment, including when repayment starts, how to make your payment, repayment plan options, and more! Keep in touch with your loan ser- vicer. Notify your loan servicer when you graduate, withdraw from school, drop below half-time status, transfer to another school, or change your name, address, or Social Security number. You also should contact your servicer if you’re having troublemak- ing your scheduled loan payments. Your servicer has several options available to help you keep your loan in good standing. n BRENDAN ZAHL, 2018-19 CBA CHAIRMAN, NBH BANK A Word From CBA... College Credit Is More than Just Grades