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

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How important is it to you?

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OPTIONS FOR FINANCING COLLEGE

Student Loan (SLB) Bank Loan Savings/ Investments Cash Value Insurance Scholarships/ Grants

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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

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STUDENT LOAN

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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

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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

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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

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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

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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

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PAYING FOR YOUR CHILD’S EDUCATION

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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

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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

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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

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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

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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

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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

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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

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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)

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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)

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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

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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

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HIGH YIELD SAVINGS ACCOUNTS

Lower interest rates Does not require active involvement Some options may have tax free benefits

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Golden Harvest Accounts (all credit Unions) FHCCU

Prosperity plus account Supreme Saver***

VMBS Isave account Igain account

JNBS LSA Classic

JMMB 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

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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

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THE END