Embedded Files
2.6
Topic 2.6 Lesson Plan
Throughout this topic we will be referencing the The Financial Aid Process. Please reference this infographic:
Click icon for Discussion
DISCUSSION:
Imagine you have loaned $1000 each to three people:
1 person is single and works as a waiter at the local cafe
1 person is a dad with one child who earns $16,000/year
1 person is a working mom with a husband and two children who earns $52,000/year
Discuss these questions with your classmates or with a partner:
Would you expect all three people to pay you back in the same timeframe?
Why or why not?
What kind of options could you provide if they have a hard time paying you back?
Would all of these options be available to all three people?
1 5 mins
In this activity, students will be able to:
Discuss the elements of the loan process
Click icon for infographic
INFOGRAPHIC:
You’ve graduated college and have reached the final stage of the financial aid process - loan repayment. Read the last section of the roadmap, labeled “Beyond Education”, and answer the question.
Consider & Answer:
1. “A loan servicer is a company that handles the billing and other services on your student loans”. Think about what you would like to know from your loan servicer about repaying your student loans. What questions would you ask?
2 5 mins
In this activity, students will be able to:
Identify questions they would like to know regarding paying their student loans.
Click icon for data
DATA CRUNCH:
Who Has the Most Trouble Paying Off Student Loans?
Follow the directions on the Google Form to complete this Data Crunch.
3 5 mins
In this activity, students will be able to:
Identify questions they would like to know regarding paying their student loans.
Click icon for article
ARTICLE:
Graduating? Here’s What to Know About Your Student Loans
Many graduates remain blissfully unaware of when their loan repayments start only to find out, to their dismay, that had they prepared a little more in advance, they could have saved themselves a lot of headache...& money! Read this article to find out what you need to know about student loan repayment when you graduate college.
After reading, answer the questions to the right.
1. What is a grace period? How long is a typical grace period?
2. What are some things you can do during the grace period to make sure your loan repayment goes as smoothly as possible?
3. Why is it a good idea to make interest payments for those loans that accrue interest during a grace period?
4 10 mins
In this activity, students will be able to:
Explain how student loan payments work
Click icon for reference
REFERENCE:
Student Loan Repayment Plans & Student Loan Repayment Options (+ VIDEO)
After graduating college, you have a number of federal student loan repayment plans to choose from based on your financial situation. Take a look at this graphic from NerdWallet and watch the video to learn more about your options for paying back Federal loans (remember that private loans will have their own options) and answer the questions to the right
1. If you can make the monthly payments, the default plan, also known as the _______________ Repayment Plan, is advisable because it keeps you on track to pay off your loans in 10 years and minimizes total interest.
2. Your friend chooses the Graduated Repayment Plan. What assumption is he making about his future income?
3. In your own words, describe the difference between loan consolidation and loan refinancing. If you lower your monthly payment, do you think the total interest you pay will increase or decrease? Why?
5 10 mins
In this activity, students will be able to:
Understand the different loan repayment options available to them
Click icon for article
ARTICLE:
Is the 10-Year Standard Repayment Plan Right for You?
In the previous resource, you learned about the Standard Repayment Plan. While this is the recommended plan, it may not always be the best option for you depending on your financial situation. Read this article to learn more about the pros and cons of this plan and what other plans may be a better fit if you decide it isn’t for you. Then, answer the questions at right.
According to this article, which two figures should you especially pay attention to when comparing repayment plans?
What can you do if you are having trouble making your loan payments under the Standard Repayment Plan?
Out of the 3 “pros” mentioned about the Standard Repayment Plan, which is the most compelling to you? Why?
Imagine that you have chosen the Standard Repayment Plan, but you have to reduce spending in areas such as groceries, gas, and going out with your friends to make ends meet. Would you change your plan? Why or why not?
True or False: You are automatically eligible for all possible federal repayment plans; you just have to pick which one you want.
6 20 mins
In this activity, students will be able to:
Analyze the standard 10-year loan repayment schedule
Click icon for Reflection
COLLABORATIVE LEARNING:
The Ultimate Guide to Student Loan Interest Rates
No matter which loan repayment option you choose, it is important to know how your monthly loan payments work. Read the following sections of this article: What is an Interest Rate? and How Interest Rates Work (accrual & capitalization) to learn about interest rates and loan payments. Then, in groups, you will create a poster to educate your peers about interest rates. Finally, you will answer the following reflection questions via Google Forms.
In your own words, explain what an interest rate is.
When you make a loan payment, what does your money go towards first: the loan principal or accrued interest? Based on your answer to question #1, why do you think this is?
Go back to the chart you saw in the second section you read (with the orange and green bars). Why does the amount that goes toward your interest decrease and the amount that goes toward your principal increase over time?
In your own words, describe what it means if the interest on a loan is capitalized (or compounded). What can you do to avoid having your interest capitalized?
7 25 mins
In this activity, students will be able to:
Analyze the standard 10-year loan repayment schedule
Click icon for compatative
COMPARE:
Which Repayment Option is Best?
Federal student loans are typically set up to be repaid on the standard repayment plan -- equal payments split over 10 years; however, multiple other repayment plans are available. Use the Loan Simulator and the steps in the Google Form to complete this activity.
(NOTE: You do not need to log in or create an account. If you are brought to the main page, click on “Or Start From Scratch”)
STUDENT NOTE: Questions & correct answers represent the current federal student loan rate, 5.5%, as of 8/9/23.
8 25 mins
In this activity, students will be able to:
Understand how to choose the right loan option for you
Click icon for Article
ARTICLE:
Student Loan Delinquency & Default Consequences
There can be severe consequences if you do not make payments towards your student loans, so it’s important to contact your loan servicer if you are having difficulty making your monthly payments. They can work with you and provide some options. Read this article to understand the impact missing loan payments could have on your life. Then, answer the questions in the Google Form.
After how many days does your loan default? What happens if your loan enters this stage?
If your loan defaults, what options are no longer available to you?
Did any of these consequences (from 15-270+ days) surprise you? Why or why not?
9 10 mins
In this activity, students will be able to:
Identify the consequences of not making student loan payments
Click icon for Article
ARTICLE:
Student Loan Delinquency & Default Consequences
There can be severe consequences if you do not make payments towards your student loans, so it’s important to contact your loan servicer if you are having difficulty making your monthly payments. They can work with you and provide some options. Read this article to understand the impact missing loan payments could have on your life. Then, answer the questions in the Google Form.
After how many days does your loan default? What happens if your loan enters this stage?
If your loan defaults, what options are no longer available to you?
Did any of these consequences (from 15-270+ days) surprise you? Why or why not?
10 10 mins
In this activity, students will be able to:
Identify the consequences of not making student loan payments
Page updated
Report abuse