Published on March 2, 2014
FINANCING TERTIARY EDUCATION Strategies for Parents and Students
FINANCING TERTIARY EDUCATION- THE FACTS Education is a right. College education is a privilege Education is expensive- everywhere and to everyone Options are not as limited as you think www.rate-bee.com
How important is it to you? www.rate-bee.com
OPTIONS FOR FINANCING COLLEGE Student Loan (SLB) Bank Loan Savings/ Investments Cash Value Insurance Scholarships/ Grants www.rate-bee.com
JUST AROUND THE CORNER Secured Bank/ Credit Union Loan 9% - 13% over 2 -5 years Parents with adequate security: cash, house, investments Dip into life savings (not recommended) Student Loan Grants/ Scholarships www.rate-bee.com
STUDENT LOAN www.rate-bee.com
STUDENT LOANS Students’ Loan Bureau loan is the best loan financing option available Lowest unsecured interest rate available. 9% compared to rates above 18% for private financing. No repayment required during college 6 months grace period after graduation SLB loan compares well with student loan options available internationally
STRATEGY FOR REPAYMENT Reduce the speed at which interest accrues on your loan by making early repayments Repay as much as possible before grace period ends Don’t wait until payments are due to start making them Don’t get a student loan www.rate-bee.com
REPAY STUDENT LOANS FASTER Accept that you have a responsibility and take it seriously Get informed and make a plan Details on student loan structure What’s your interest rate How much time to repay Can you make early payments Can you pay before the due date Pay early and often Reduces interest accrued Lower loan balance when payment becomes due www.rate-bee.com
REPAY STUDENT LOANS FASTER Try to make payments while in school to reduce the compounding effect Ask your parents to make small payments to your loan while you are in school Make payments from a part time job Get a part time job during school and work every summer This will help you build your resume, network and get a job faster out of school Party less and enjoy yourself more creatively www.rate-bee.com
REPAY STUDENT LOANS FASTER Join a credit union and save monthly This will help you to make payments during the grace period Also help you to build credit history in the event you choose to refinance Network in college and start your job hunt early (at least a year) LinkedIn vs Facebook Reduces time spent unemployed Allows you to start making payments on time Live on a strict budget, put off luxuries for a while Try to get a job at a financial institution, government agency or well established business www.rate-bee.com
REPAY STUDENT LOANS FASTER Refinance only if you can get another unsecured loan at a lower rate. Most likely this will be from an employer Try to refinance before grace period ends DON’T miss any payments Be grateful for the opportunities you have received www.rate-bee.com
PAYING FOR YOUR CHILD’S EDUCATION www.rate-bee.com
CONSIDER ALL THE COSTS Inflation Tuition Books Food Clothing Personal items Travelling Miscellaneous college fees Cell phone Talk to an advisor to estimate the projected costs of college www.rate-bee.com
OPTIONS FOR FINANCING TUITION Don’t Pay Investment Stocks/ Bonds Fixed Assets Collective Investment scheme Repurchase Agreements Insurance Cash value Investment linked Long term Savings Savings Account/ Fixed Deposits www.rate-bee.com
DON’T PAY OPTION Studies show higher graduation rates but lower grades More partying less studying More likely to choose unprofitable majors Bigger burden after graduation Students who pay their own way do better on average www.rate-bee.com
INVESTMENT OPTIONS Highest rates of return Highest risk Medium to long term outlook Requires an investment advisor Enjoy some tax free benefits Salary deduction and standing order payments possible www.rate-bee.com
INVESTMENT OPTIONS Stocks/ Shares Represent partial ownership in a company Long term investment option Preference shares or Regular shares Benefits of price appreciation and dividends No tax in price appreciation Low tax on dividends Highest risk but also highest returns Reduce risk by diversifying www.rate-bee.com
Stocks cont’d Contact an investment company Mayberry Scotia Investments Barita NCB Capital Markets JMMB Stocks and Securities Investments VM Wealth Management First Global Financial Services Proven MVL Investments www.rate-bee.com
INVESTMENT OPTIONS Bonds Loan to a company or the government Benefit from price increase and interest Higher rates than savings accounts or investment accounts $5000 minimum to buy government bonds Interest/ Coupon payments are taxed Interest payments on global bonds are not taxed at sourced Allows for fruitful foreign currency investment www.rate-bee.com
Bonds cont’d Contact an investment company Mayberry Scotia Investments Barita NCB Capital Markets JMMB Stocks and Securities Investments VM Wealth Management First Global Financial Services Proven MVL Investments www.rate-bee.com
INVESTMENT OPTIONS Mutual Funds and Unit Trusts Pooled investment option allows for risk sharing Mutual funds are usually foreign currency Allows investment options not otherwise available High value real estate Private equity International bonds International stocks Tax free benefits if held for five years (Unit Trusts) www.rate-bee.com
Mutual Funds NCB Capital Markets Mayberry FGFS JN Fund Managers Barita Scotia Investments Unit Trust Sagicor Barita Scotia Investments JMMB NCB Capital Markets www.rate-bee.com
Specialized Investment Accounts Barita Tuition Builder Mayberry Gold Repurchase Agreements (repo) and LSAs (all) www.rate-bee.com
INSURANCE OPTIONS NCB Insurance Omni Educator Earn tax free interest Additional 20% Grant towards tuition Life insurance coverage Start with as little as $1000 per month Scotia Mint Earn tax free interest Life insurance coverage Qualify for an annual scholoarship for high school or college Inflation linked option Start with $2000/mth www.rate-bee.com
Guardian Accumulator Earn tax free interest Life insurance coverage Parental waiver benefit allows policy to continue in event of parental death or disability Start with a little as $2000/mth Guardian Investor 15 year policy Ideal for saving towards college Invested in stocks Contact advisor for more details www.rate-bee.com
HIGH YIELD SAVINGS ACCOUNTS Lower interest rates Does not require active involvement Some options may have tax free benefits www.rate-bee.com
Golden Harvest Accounts (all credit Unions) FHCCU Prosperity plus account Supreme Saver*** VMBS JNBS LSA Classic JMMB Isave account Igain account Tax Shelter Fixed Deposit (any bank or credit union) www.rate-bee.com
Find more information about: savings acounts Fixed Deposits Repo account Visit www.rate-bee.com compare institutions and find the best rates
STICK TO THE PLAN Start early Earlier start means less monthly savings Use a salary deduction or a standing order Choose an option which doesn’t allow easy access to funds Increase your savings as your salary increases Go for tax free options to ensure maximum returns Ensure you have other long term investments for retirement, emergencies or vacations Set periodic goals www.rate-bee.com
COST CUTTING IDEAS Carpool Buy in bulk with family or friends Have extra space? rent out a room Eat Healthier Tax free Cheaper short term and long term Cook more often DIY and sell it! Buy used books Never buy full price/ Shop off season Shop online but travel less often Reduce Credit cards or don’t get any Refinance high interest loans www.rate-bee.com
BUDGET MANAGEMENT Daily Finance http://www.dailyfinance.com/ Microsoft Finance Plus software Download budget templates from Microsoft website Download personal finance software from sourceforge.net Use personal finance apps for your tablet or cell phone Reward yourself when you reach a goal www.rate-bee.com
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