Faith Morrow
EverFi is a digital program that helps students build knowledge about acquiring credit, growing credit, managing credit, and dealing with fraud. It offers a course called Build: Credit Fundamentals, which teaches students about the importance of building and maintaining good credit strategies and making wise financial decisions. EverFi also offers a course called Pathways: Financing Higher Education, which teaches students about the impact of high debt from education loans and how to manage debt responsibly. While it is unclear what a credut buker loan is, one way to build credit is through credit-builder loans, which help individuals establish a positive payment history by reporting timely payments to credit bureaus.
| Characteristics | Values |
|---|---|
| Purpose | To provide financial literacy education to students |
| Target Audience | K-12 students |
| Topics Covered | Student loans, financial aid, FAFSA, budgeting, credit, investing, basic investment concepts, financial markets, accounting, data science, mental health and money, financial planning, business, health literacy |
| Format | Digital programs, courses |
| Cost | Free |
| Languages | English, Spanish, French |
| Benefits | Improved financial literacy, better management of finances, reduced financial stress, improved academic performance, higher credit scores, reduced likelihood of falling behind on credit card payments, preparation for college career and financial decisions |
Student loan debt
The high cost of tuition fees often means that students need to take out substantial loans to fund their education. This can result in a heavy burden of debt, which can have long-term financial implications for graduates. With the rise of tuition fees, it is becoming increasingly important for students to explore alternative strategies to minimise or avoid taking out loans. This includes applying for grants and scholarships, attending community college first, and part-time employment.
EverFi provides resources to help students make informed decisions about financing their education. Their courses cover topics such as different types of loans, interest rates, and how to manage debt responsibly. They also offer guidance on alternative pathways to minimise or avoid student loan debt, such as federal aid, grants, scholarships, and work-study programs.
While student loan debt can be a necessary investment in one's future earning potential, it is crucial for students to carefully consider their financial goals and educational needs before taking on debt. This includes researching average salaries in their chosen field to understand the feasibility of repaying loans and exploring other financial aid options to make informed choices about their academic pursuits.
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Financial literacy
A key aspect of financial literacy is understanding how to create and stick to a budget. This involves tracking income and expenses to ensure that spending aligns with one's financial goals and priorities. Budgeting is a powerful tool that helps individuals control their finances and avoid financial stress by spending within their means. It also enables them to allocate funds effectively, ensuring they have enough for their needs and wants.
Another important component of financial literacy is understanding debt and how to manage it responsibly. This includes knowledge about various loan types, interest rates, and repayment strategies. By comprehending the full cost and implications of debt, individuals can make informed borrowing decisions and avoid the pitfalls of high-interest debt. Financial literacy also encompasses knowledge of alternative financing options, such as grants, scholarships, and federal aid, which can help reduce the need for loans.
In addition to budgeting and debt management, financially literate individuals possess knowledge about credit and investment products. They understand the importance of managing their credit reputation and are equipped to evaluate the trade-offs between different investment options. This includes understanding how today's investment decisions can impact future tax liabilities. With the rise of digital financial tools, such as e-wallets and P2P lending, financial literacy also extends to using these tools wisely to take advantage of their benefits.
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Interest rates
It is important to understand the difference between a loan's interest rate and its Annual Percentage Rate (APR). The APR represents the total cost of the loan, including any associated fees, expressed as a yearly rate. It is designed to make it easier to compare different loan options from various lenders. Credit card companies are required to disclose the APR before issuing a card and on monthly statements.
When considering a loan, it is crucial to comprehend how the interest rate will affect the total amount you owe. A higher interest rate will result in higher interest payments over the life of the loan. Fixed interest rates remain constant throughout the loan, while variable interest rates are tied to a benchmark rate and may fluctuate. Understanding these nuances can help you make informed financial decisions and effectively manage your debt.
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Federal aid
Federal student aid is available to help students pay for college or career school. To be eligible for federal student aid, you must meet certain basic requirements, including demonstrating financial need. The Free Application for Federal Student Aid (FAFSA) is used to determine eligibility for grants, scholarships, work-study programs, and loans. Completing and submitting the FAFSA is free and provides access to the largest source of financial aid for school. It is important to submit the FAFSA application before the deadline to be considered for federal student aid.
The FAFSA is also used by states and colleges to award their own financial aid packages. For the school year 2024-25, the federal deadline to submit the FAFSA is June 30, 2025, and for the school year 2025-26, the deadline is June 30, 2026. Many states also use the FAFSA for their financial aid programs, and these deadlines should be checked separately.
Students can use online tools and calculators to estimate the cost of attending a specific college. This helps them compare schools and choose the best option. It is recommended that students have a plan for repaying their student loans before the payments begin. They should also learn how to make timely payments while keeping the cost manageable. If a student struggles to repay their loan, they should contact their loan servicer. Failing to pay a student loan has serious consequences.
In addition to federal aid, students can also explore other options to finance their education, such as co-signing loans with their parents or other parties. However, it is important to remember that co-signing comes with shared responsibility for the debt. EVERFI's "Financing Higher Education" course helps students understand the impact of debt from higher education loans and how to manage that debt responsibly.
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Financial aid
One notable aspect of EverFi's financial aid guidance is its emphasis on building credit. Students can learn about the fundamentals of credit, including what it means to be creditworthy and the differences between being an authorized user, owning a credit card, or having a debit card. Understanding credit reports and scores is essential, and EverFi teaches students how to improve and interpret them. Additionally, students are educated on recognizing identity theft and addressing inaccuracies in their credit reports.
EverFi also offers practical advice on acquiring, growing, and managing credit effectively. This includes exploring the concept of credit-builder loans, which are specifically designed to help individuals establish a positive payment history and build their credit scores. These loans provide an opportunity to demonstrate consistent, timely payments, which is a significant factor in boosting creditworthiness. Students can gain insights into different loan options, such as Payday Alternative Loans (PALs) offered by federal credit unions, which typically have lower fees and APRs.
Furthermore, EverFi highlights the role of cosigners in obtaining loans. Students learn why they may need a cosigner, how to choose an appropriate one, and the impact on credit-building. This knowledge is particularly relevant for teenagers and young adults who may have limited credit histories. By understanding these financial aid options and credit-building strategies, students can make more informed decisions about their educational financing and future financial well-being.
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Frequently asked questions
A credit-builder loan is a small loan that helps you build your credit score by letting you demonstrate that you can make regular on-time payments. The lender typically puts the money you borrow into a reserve account it controls. You then make regular payments toward the loan, building a positive payment history that’s reported to the credit bureaus. When the loan is paid off (or you reach a certain threshold), the lender gives you access to the funds.
EverFi's Credit Fundamentals is a digital program that helps students build knowledge about acquiring credit, growing credit, managing credit, and dealing with fraud or inaccuracies. Students will learn to make wise decisions that support their current and future financial well-being, with an emphasis on building and maintaining good credit strategies.
There are several ways to build your credit score as a teenager. You can become a joint user on a parent’s card, or your parents can co-sign a loan or credit card with you. You can also take out small loans or use a credit card to make purchases and build your credit score by making on-time payments. Additionally, you can sign up for a rent reporting service to have your on-time rental payments count toward your credit score.
