The Student Loan Process in 3 Steps: What You and Your Child Need to Know

April 8, 2016 Christina Pontisso Leave a comment

By: Kimber Carmichael, Lancaster Red Rose Credit Union
Lancaster Red Rose CU serves Lancaster County, PA providing a variety of financial services.

College is both an exciting and daunting time for you and your child. The rising prices of college tuition, the stress of student loans, and learning how to maximize on their capabilities has become a commonly shared feeling amongst parents and children.

Read on for three simple steps to assist you with the student loan application process and help you and your child start off on the right foot.

1. Understanding Your Financial Aid Options

First and foremost, what types of financial aid are there? Financial aid can be broken down into three categories:

Scholarships: Scholarships are a financial reward given to support a student’s educational efforts. There are hundreds of thousands of scholarships offered each year through universities, private grants and local businesses.
Grants: Grants for education may come from either state or federal governments. Oftentimes, these grants will be provided to the university directly. If a student meets certain criteria, they may be awarded the grant. The grant is normally applied to the student’s tuition & room and board. If there is subsequent money remaining on the grant, it will be given to the student to pay for other collegiate expenses directly.
Loans: Loans are granted by the Federal Government or the private lenders. Loans can be applied to expenses such as room and board, tuition or textbooks. Loans accrue interest and must be payed back in full.

2. Filling Out a FAFSA Application

FAFSA (Free Application for Federal Student Aid) is the largest provider of student financial aid in the United States. Annually, the FAFSA provides more than $150 billion in federal grants, loans and work-study.

Once you submit an application, FAFSA will assess the amount of money a family is expected to contribute to a child’s tuition. Factors such as income, mortgage, number of children and acquired assets are features that are incorporated into their calculation.

The FAFSA application for federal aid is extensive, but the reward far outweighs the time put into applying for the application.

3. Prepare for Repayment Options

Familiarize yourself and your child with the following terms when discussing how they might pay back their student loans:

Interest Rates: Interest is money a lender is paid in exchange for the borrowing of money. Federal loans for an undergraduate degree accrue an average interest of about 4-6%. While this is relatively low in comparison with other loan types, the numbers can add up if you have a relatively large loan to pay back over several years. Students may write off their student loan interest on their taxes by receiving a 1098-E form through their student loan provider.

Consolidation: If you or your child is overwhelmed with student loan payments, consolidation might be an option. By consolidating & refinancing your loans, you can conjoin several small loans and debts into one monthly payment (this is dependent on your lender). While you may be paying a bit more per month, all your owed money is in one place with the same interest rate.

Repayment Options & Settlements: Many students are nervous to call and debate their payment options. However, most lenders have flexible repayment policies based on your income and financial needs. Contact your lender for monthly balance and deferment options.

Grace Period: A grace period is the amount of time a student has until they must start making repayments on their student loans. Most grace periods last about 6 months post graduation. While many students wait until their grace period to start saving and learning about their student loan repayments, it’s important to understand budgeting for repaying your student loans while still in college.

Before signing up for any loan, make sure you understand all the terms and conditions. By following this quick guide, you should be able to navigate the murky waters of student loans a little easier and find yourself acing your, and your child’s, financial future at the start of the new school year.

Check out Lancaster Red Rose Credit Union blog!

Car Loans

Consumers can save money on auto loans by borrowing from credit unions

December 4, 2015 Christina Pontisso Leave a comment

Woman shopping for a new car at a dealership lot.

Searching for a new or used car? Before you begin, the smartest thing you can do is to take the time and look at all the factors of ways to reduce loan costs. No matter where you live, there are plenty of ways you can save money, you just have to take the time to do the research!

Nerdwallet makes it easy for you by already doing the work for you! In a study released last month, Victoria Simons, took data from Experian (credit agency) and NerdWallet that showcased loan trends at a state level. This includes average loan amounts, interest rates, and monthly payments. All states except Delaware, Oklahoma, Rhode Island, and Wyoming were included in the study. Sales tax wasn’t taken into account.

In conclusion, the study found that residents in the South are paying the most in financing costs while also taking out the longest-term loans.

Other key takeaways:

“Loan costs are the result of multiple factors. A holistic approach is necessary to understand average loan rates and balances, especially at the state level. To understand why residents of some states pay more, you must consider the type of vehicle financed, its cost, the length of the loan, the interest rate and the credit history of the borrower. Louisiana residents have the highest average loan amounts, at $22,445. Michigan sees the lowest average figure at $15,959.
Credit matters. The average used-vehicle loan interest rate is higher in Southern states, and credit is a big factor. Seven of the 10 states with the highest interest rates are in the South, including Mississippi, South Carolina, Alabama, Georgia, Florida, Louisiana and Texas. Mississippi is No. 1 at 11.47%.
Longer loan terms are costlier. This is because you accrue interest over a longer period of time, and sometimes have to pay higher interest rates to get that longer term. Louisiana has both the highest average loan amount and loan term.”

So how can consumers save money on auto loans? HEAD TO YOUR NEAREST CREDIT UNION. It’ll save you time and money.

Borrowing from a credit union, as NerdWallet points out, will secure you with a lower rate than what is offered at a dealership or bank. Since credit unions are not for profit organizations they are able to offer more appealing rates that benefit you the consumer! You can bypass the pushy sales pitches at the dealership and bank when applying for an auto loan at a credit union. “According to The New York Times, the current average interest rate for a 36-month used-car loan is 3.25%. With credit unions, you may be able to qualify for rates at or around 2%. This results in a decent chunk of savings for you over the life of the loan.”

View the full article to learn more about this study and how well your state performed, below!
Used-car loans: southern states see higher interest rates

Community Involvement

Orion Federal Credit Union Gives Back in 2015

November 19, 2015 Christina Pontisso Leave a comment

Orion Federal Credit Union affirms commitment to the Memphis community through volunteer and philanthropic activities for 2016.

MEMPHIS, Tenn. (Nov. 17, 2015) – Orion Federal Credit Union , the largest federal credit union in West Tennessee, is committing to dedicating dollars and volunteer hours to supporting the Memphis community again in 2016 via various local nonprofit and community initiatives. Year to-date in 2015, Orion employees have logged more than 200 volunteer hours working with schools in Shelby County, sponsored 22 local events and donated critical funding to 27 local groups.

Orion has provided financial support to local groups ranging from Ronald McDonald House Charities of Memphis, the Boys & Girls Club, Literacy Mid-South and the Wolf River Conservancy, among others. The company has also sponsored a wide variety of community events and initiatives including the Levitt Shell Free Music Concert Series, Starry Nights and the Orpheum Summer Movie Series.

“Orion is committed to improving the lives of Memphians by giving back locally and building true community partnerships,” says Daniel Weickenand, CEO of Orion. “From sponsoring events at the Levitt Shell to our partnerships with schools across the city; Orion is dedicated to supporting these important causes and providing opportunities for our members and employees to give back.”

One of Orion’s key philanthropic initiatives is the Orion Gives Back program, which selects one local organization each month as a community partner, receiving a cash grant and the support of the credit union’s members and employees. Each month, the selected organization is highlighted on Orion’s website and at the company’s nine local branches – where employees will often collect much-needed supplies for these area groups.

Orion is also currently participating in the Coats for Kids drive in partnership with News Channel 3. Memphians can donate new and gently used coats to any Orion branch before November 20. This year, the campaign’s goal is to gather 3,000 coats for children across the city.

“Orion Federal Credit Union’s long-standing support of Ronald McDonald House Charities of Memphis is a great illustration of their commitment to connecting deeply with the city and going above and beyond for countless causes like ours across the city,” said Caron Byrd, Ronald McDonald House Charities of Memphis executive director. “Orion not only gives generously to help us provide a ‘home-away-from-home’ for our families – their employees also provide crucial volunteer hours and their members donate much-needed goods for the house – they are truly a well-rounded partner!”

Orion has a long history of community involvement. The credit union has served the Mid-South since 1957, providing a full spectrum of banking options ranging from savings and checking accounts to auto, mortgage and personal loans to those who live or work in the greater Memphis area. Adds Weickenand, “As a financial leader in our community, it’s long been our mission to serve members in the greater community at large – a notion that started with our partnerships with Shelby County Schools in our early days as a teachers’ credit union.”

For more information on how an organization can be considered for Orion Gives Back, please e-mail marketing@orionfcu.com.

Listing of 2015 Support and Sponsorship:

Organizations/Nonprofits

Africa in April
Baptist Memorial Camp Good Grief*
Belle Fund
Carpenter Art Garden*
College Initiative*
Girls, INC*
Harwood Center*
Hattiloo Theatre*
Hope House
Kate Bond Elementary
Kiwanis Charities
Memphis Education Association
Midsouth Sober Living
NAACP of Memphis
New Ballet Ensemble Memphis
Operation: Safe Community
Pink Palace Family of Museums*
Porter-Leath
RISE Foundation*
Ronald McDonald House Charities of Memphis
Salvation Army
South Memphis Alliance*
Southern Reins*
Stax/Soulsville
Tennessee Arts Academy
Volunteer Odyssey*
Westside Elementary
Women’s Foundation for a Greater Memphis

(* denotes inclusion in the Orion Gives Back program)

Sponsorships

A Summons to Memphis
Baptist Healthcare – Art of Giving
Consortium MMT – Epitome of Soul
Humane Society of Memphis – Animal Play Yards
Levitt Shell – Orion Free Concert Series
Memphis Farmers Market
Memphis Library Foundation – Cloud 901
Memphis Paws – Burgerfest
Methodist Healthcare – Living Awards
Multiple Sclerosis Society – Bosco’s Cycling Team
National Civil Rights Museum – Freedom Award Gala
Orpheum Theatre – Orpheum Summer Movie Series
Overton Park Conservancy – Day of Merrymaking
Rajun Cajun Crawfish Festival
Regional One Health Foundation – One Night Gala
RISE Foundation – An Evening of Change Gala
RiverArts Festival
Rylee’s Run 5k
Shelby Farms – Starry Nights
Southern Hot Wing Festival
Wolf River Conservancy – Cycle The Greenway
WREG Coats for Kids

About Orion Federal Credit Union:

Founded in 1957, Orion FCU has grown to become the largest credit union in West Tennessee, with over 62,000 members, $575 million in assets and nine branches. Orion offers a full spectrum of banking options ranging from savings and checking accounts to auto, mortgage and personal loans to almost everyone who lives or works in the greater Memphis area.

Financial Education

When to start teaching kids about money

November 9, 2015 Christina Pontisso Leave a comment

Dave Ramsey gives readers a quick guide to teaching their children about money, based on their age.

For those with children in kindergarten/elementary:

Start by setting an example
Use a tangible example to show children the meaning of saving (e.g., piggy bank)
Show them that it costs money to buy things

For tweens:

Tweens are now able to make decisions and understand and realize the each financial decision comes with a consequence
Give commissions, not allowances to help them understand the money is earned by doing work
Stress the importance of giving, especially right now in preparation for the holiday season

For teenagers:

By this time, you should set your child up with a simple financial account at your nearest credit union. This will help them start to manage their own money correctly
Help them find their first job
Make sure your child understands the dangers that come with getting a credit card

For more information, check out the full article below!
9 ways to teach your kids about money

Community Involvement

Michigan credit unions pay it forward in communities

October 22, 2015 Christina Pontisso Leave a comment

Michigan credit unions did a fantastic job by giving back in their local communities. The Michigan Credit Union League highlights the various credit unions and their good work.

Marshall Community Credit Union recently donated 4,000 bags of popcorn to a local elementary and high school. The bags of popcorn are distributed during home football and basketball games at the high school. While the bags at the elementary school are used for the parent council organization.

MCCU’s financial education coordinator Andrea Tucker stated the donation was, in part, motivated by the student-run credit union branch at Marshall schools, “With so much that the schools do for us and for our CU In School program, it’s the least we can do for them.”

Forest Area Federal Credit Union presents staff with $500 to Pay It Forward within their communities.

“My staff was excited and proud that we could do this,” CEO Robert Raden said. “They expressed that it was such a rewarding experience to know that our credit union is as community committed as we possibly can be. A strong relationship in our communities has made our credit union a success and our board is always open to be a benefactor to all of our communities in tough times.”

Great job to these Michigan credit unions living out the people helping people philosophy!

Holiday Season

Security Credit Union is Supporting the Troops

October 19, 2015 Christina Pontisso Leave a comment

Security Credit Union in Flint, Michigan, is sending over care packages to deployed men and women in the US military. The press release below is available to view on CU Social Good

support troops

FLINT, MI –Security Credit Union (SCU) has partnered with Operation Care Package of Michigan to host its fourth annual “Support Our Troops” donation drive, as the nonprofit prepares to send care packages to United States soldiers overseas. Donations will be accepted at SCU’s 10 offices in mid-Michigan and two offices in metro Detroit, now through Friday, Oct. 23.

Operation Care Package of Michigan aims to provide deployed military service men and women with the comforts of home by collecting, compiling and sending care packages overseas. Items collected during SCU’s “Support Our Troops” drive will be packaged and shipped to the troops during the holiday season.

“Military service men and women sacrifice so much to protect our freedom. Partnering with Operation Care Package to host this donation drive is a small, but impactful way we can give back to those who give so much,” said Christopher Estes, SCU President and CEO. “We invite community members to stop by their local SCU office to drop off items that will bring joy to our soldiers this holiday season.”

The best tricks for your Halloween budget

October 16, 2015 Christina Pontisso Leave a comment

Did you know that the average American will spend $74 this year on Halloween activities? Between costumes, candy and decorations celebrating Halloween can be costly. NRF reports that Americans spend $1.2 billion on adult costumes while total spending on children’s costumes tops out at $950 million.

Don’t be frighten – there are ways you can celebrate that will trim back the costs!

Go retro with your games
Take advantage of your community
Recycle candy
Get creative with costumes
Prepare early
Make decor that’ll last
Have fun in the kitchen

For more information check out the full article below:
The best frugal Halloween tricks

Budgeting

Choose the right credit cards

October 13, 2015 Christina Pontisso Leave a comment

It’s important to make smart decisions when selecting a credit card to use. Credit cards can be good and bad, depending on the card holder’s spending habits.

You might be receive various offers from credit card companies either in the mail or email, saying you’re qualified, apply now! However, to first do your homework.

Think about, can you afford this? Will you be responsible with your payments? Do you really need this card? How will it help your credit score?

During the selection process, it’s important to look at the late fees policy and other charges associated with the cards. Take your time and read the fine print! Some cards charge an annual fee to use the card – stay clear away from that particular card!

Also, make sure you know and understand what APR stands for – Annual Percentage Rate. This is how much you’ll pay in interest if you carry a balance from month to month and how much of % the rate will change if you cannot make payments on time. This is an essential component when deciding on which card to select.

But most importantly, you need to be aware of your spending habits. Are you a savor or spender? What is your income like? What are your expenses, etc? Just some of the questions you should ask yourself during the credit card search.

For more information, check out Generations FCU article:
Choose Your Credit Cards Wisely

Financial Education

Comparison between bank and a Credit Union

October 7, 2015 Christina Pontisso Leave a comment

For some people, they still don’t know what the difference is between a bank and a credit union. This Saving Advice article helps clear up any confusion you may or may not have had regarding these two financial institutions.

Due to the recent 2008 financial crisis, banks were hit hard financially and negatively by the public. Since then, many people have been bad-mouthing banks due to their involvement and role in the financial crisis. Leaving credit unions looking innocent and more favorable among consumers.

Banks have been struggling to maintain or rebuild what they originally had before the crisis. While credit unions, one of the few financial institutions, have gain momentum.

Key difference between banks and credit unions is ownership.

Banks are owned by a company.

Credit unions are owned by their members. That means when you become a member, despite how much you financially invest into the credit union, you are a part-owner.

Key difference between banks and credit unions is interest rates.

Credit unions usually offer high interest rates on savings, checking, and certificates of deposit. Credit unions are the only financial institution that can do this because they are NOT for profit.

Key difference between banks and credit unions are fees.

Fees are lower and minimal at credit unions vs banks. Since credit unions are democratically governed, if members voice they are sick of high fees they will lower them. In addition, credit unions are more flexible on overdraft policies.

Key difference between banks and credit unions are ATMs fees.

Credit unions work together in the form of shared branch network, that provide more than 30,000 surcharge-free ATMs to ALL credit union members. Banks compete with one another, and charge excessive ATM fees to customers who bank out of their network.

If you’d like to learn more, check out the full article below that lists out more advantages to bank with a credit union:
What’s the difference between a bank and a credit union?

Credit Union Difference

Spokane Media FCU lives out people helping people philosophy for member

October 5, 2015 Christina Pontisso Leave a comment

The staff at Spokane Media FCU in Washington state recently helped out a member that had lost his job and was piled up on medial and other overdue bills. While banks might have shunned this individual away, Spokane Media welcomed the member and lived out the “people helping people” philosophy to help get this member back on his two feet.

The member, Gary, aged 66, had recently lost his job as a dishwasher and had medical bills from a past injury. Gary was about to run out of his small unemployment benefits and social security checks that were coming in.

Staff at the Spokane Media FCU connected Gary to an assistance living center for those with disabilities and low-income. Gary now resides at this residence and even received a complimentary cell phone.

Since Gary is a Vietnam vet, Spokane staff contacted the Veterans Administration to get him a pension for his service. Three months later, Gary is receiving an extra $350 a month that goes towards his expenses.

What’s impressive is the staff at Spokane got Gary’s dentist to forgo most of his past due dental appointment bill, and chipped in for the rest! Wow! This is a great example of how credit unions put their members first. Great job to the staff at Spokane!

In addition, Gary was placed on the Food Stamps program and Meals on Wheels, which serves free lunch at his new residence.

Way to go Spokane Media FCU! What you did for Gary is amazing! You should be proud of yourselves. Keep living out the people helping people meaning of life!

To view the full article, please click below
Spokane Media FCU employees go ‘above and beyond’ aiding member