=Intro bookend= Hi. In this video, I'd like to give you some extra motivation to learn about personal finance. If you are watching this, you are probably either a college student, or soon will be, or recently were. If so, the issue of paying for college should be very personally relevant to you. So let's discuss some aspects paying for college. =Learning objectives= After this lesson, I hope you will be able to do the following: * Classify ways to pay for college * Distinguish between loans and grants and * Interpret items on a university billing statement Finally, I hope you will * Look forward to learning more about finance =Paying for college= So let's see, what are the major ways one can pay for college. First, the obvious one - you could use your own money. You can also use someone else's money that they give you for free, which usually happens in the form of grants and scholarships. Or, you can use loans - other people's money that you have to pay back later - plus a little bit to make it worth their while. Loans can be broken down into general purpose consumer loans, or special-purpose student loans, which in turn come from federal, state, and private sources. We will discuss all these in greater depth in a later video. For now, let's take a look at a sample student bill from rowan university. =Student bill= This is an actual student's Fall 2014 university bill. Let's examine the major components. You can see here in the charges column we have a bunch of different things that the university charged the student for. In the credits column are the different ways that the student is paying for all these things. =Quiz 1= So I'd like you to pause the video and examine the bill for a few minutes, and try to answer these questions. What is the total cost of one semester, as billed by the university? and also Can you spot any loans in this student's college financing mix? Let's bring up the bill again, please pause the video here and see if you can find answers to these questions. =Student bill 2= Welcome back, I hope you gave these a try. So first question, the total amount that the university billed the student. There is a convenient line right here, total semester charges, which shows the total amount billed by the university is 13 thousand 812 dollars. The total amount paid by the student happens to be exactly the same, 13812, so the student doesn't owe the university any more money for this semester. But there's a bit of a quirk here. Notice this item, student refund, of 1680 bucks. This is money that the univerity actually gave back to the student. So the net bill to the student is less, 13812 - 1680 which comes out to 12132. So I guess this turned out a bit tricky. So what's the deal with the refund? Let's talk about it after we find any loans that the student might have used. Due to the abbreviations, it takes a bit of work to figure out what all things are. Maybe you had to search the web for 'federal seog' to figure out whether it is a loan or not. There does happen to be one loan, the federal direct subsidized loan, in the amount of 2 thousand 226. So what happened is that the loan disbursement pushed the total student payments above the total amount billed, so the university gave the student the refund of 1680 bucks to make everything balance back out. Overall, it doesn't look too bad, out of the 12 thousand or so that the university actually billed, the student managed to cover everything with mostly grants and scholarships, and only had to take out 2226 dollars in loans for this semester. But realize that this is only one semester. Over the course of 4 years, or 8 semesters, if the student continues doing this, he will accumulate 8 times the 2226, which comes out to 17 thousand 808 dollars, which is pretty hefty. One other thing to pay attention here the "payment visa" item, which looks like a payment with a credit card, which is another form of loan. As you can see, there is a lot of stuff happening here. Some questions you might have are, what does it mean that the loan is federal and subsidized? What's up with the credit card payment, and what are credit cards anyway? How can I get my hands on all those juicy grants and scholarships? Is there anything in particular the student should do with his refund money? We'll talk about all these things in later videos. But first, we have to take a detour and talk about some foundational material. Here's the plan. =Where we go from here= In the next few videos we'll talk about the nature of money, banking, and transactions. After that, we'll talk about income, spending, and borrowing, and good vs bad debt. We'll then get back to discussing the cost and value of education, and follow that with a discussion about money, time, and interest. We have a long and interesting journey ahead of us. Thank you for your attention, hope to see you in the next video.