Monday, July 13, 2009
According to the College Board, students who have borrowed for college have a median amount of debt after graduation of around $19,000.
If your former student owes money on Stafford loans, they should consider a fixed consolidation loan that may be able to significantly reduce their interest rate and possibly qualify for flexible repayment terms, including a loan deferment for up to three years. New graduates should be extremely attentive to their budget. By establishing a budget now, early in life, they will develop strong financial habits that they can take with them throughout their working lives.
Speaking of working lives, odds are that their first job removed from college will not be one of their high earnings years. If you have an annual salary of $35,000, your actual take home pay after taxes, benefits and retirement savings will only be about $25,000. You should plan on around 30 percent for housing, 15 percent for food, and 10 percent each for utilities, transportation, debt repayment and ideally, savings. That will leave about 15 percent for discretionary purchases such as clothing and entertainment.
Health insurance may not be high on a new graduate's list of priorities but it is a requirement in Massachusetts that they have a minimum amount of health insurance. A dependent child could be dropped from your policy upon graduating. You should contact your benefits office and ask about COBRA coverage. This can be an expensive option, often between $200 and $500 month.
Your grad could save a substantial amount by purchasing their own policy. A student policy or short-term coverage to bridge the gap between graduation and a job with benefits with a higher deductible could cost as little as $50 to $150 per month.
If you are willing to help out your grad financially, health insurance may be a nice way to do it.
If your former student owes money on Stafford loans, they should consider a fixed consolidation loan that may be able to significantly reduce their interest rate and possibly qualify for flexible repayment terms, including a loan deferment for up to three years. New graduates should be extremely attentive to their budget. By establishing a budget now, early in life, they will develop strong financial habits that they can take with them throughout their working lives.
Speaking of working lives, odds are that their first job removed from college will not be one of their high earnings years. If you have an annual salary of $35,000, your actual take home pay after taxes, benefits and retirement savings will only be about $25,000. You should plan on around 30 percent for housing, 15 percent for food, and 10 percent each for utilities, transportation, debt repayment and ideally, savings. That will leave about 15 percent for discretionary purchases such as clothing and entertainment.
Health insurance may not be high on a new graduate's list of priorities but it is a requirement in Massachusetts that they have a minimum amount of health insurance. A dependent child could be dropped from your policy upon graduating. You should contact your benefits office and ask about COBRA coverage. This can be an expensive option, often between $200 and $500 month.
Your grad could save a substantial amount by purchasing their own policy. A student policy or short-term coverage to bridge the gap between graduation and a job with benefits with a higher deductible could cost as little as $50 to $150 per month.
If you are willing to help out your grad financially, health insurance may be a nice way to do it.
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