Personal Financial Planning

Paper Summary:

In this article, the writer focuses on student debt, concentrating on the types of debt incurred by students. The writer looks at the overall level of student debt and discusses how students can plan and manage their debt. This paper deals with each type of debt in turn: publicly-financed student debt related to tuition, privately-financed student debt related to studies, and personal debt, primarily credit cards. The writer notes that each category has a specific type of repayment needed, and a different payment period. The writer concludes that a student should regard him/herself as an asset, and make some financial assumptions about how much he/she will earn in the future, and what his/her debt capacity is at present.

Outline:
Introduction
Table 1: Average Student Debt
Supporting College Tuition
Personal Debt
Private Student Loans
Income and Saving: The Forgotten Part of Personal Financial Planning
Conclusion

From the Paper:

"Students are able to transact student loans through private institutions, chiefly banks. These banks then receive support in the form of risk limitation from a federal body led by the Human Resources and Social Development Canada, which was created to support college education. As with direct federal student loans, the payment of interest and principal is put off until the student starts earning an income. As with the direct loans, students should prepare a future expected cash flow pro-forma statement in order to understand how much they will earn, and how able they will be to pay back the loans."

Sample of Sources Used:

• AP. (2002, October 4). College Costs Push Americans to Canada. CNN , p. n.p.
• Bitti, M. T. (2007). Student Debt. Retrieved November 19, 2007, from Reader's Digest Canada: http://www.readersdigest.ca/mag/2005/07/debt.php
• Block, S. (2006, February 22). Students suffocate under tens of thousands in loans. USA Today , p. n.p.
• Carnahan, I. (2003, August 11 ). Pay Now, Learn Later. Forbes , p. n.p.
• Day, J. C. (2002). The Big Payoff: Educational Attainment and Synthetic Estimates of Life-Work Earnings. Washington: US Census Bureau.

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• Analytical Essay # 57813 : "Financial Planning for Retirement"

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