By Sean Corey
Staff Writer
According to CNN, the average student loan debt reached $29,400 per student in 2012, up from $18,750 in 2004.
Student loan debt is quickly becoming a problem for our generation. Many recent graduates have trouble managing
and paying their loans. If you have student loans, it can be a challenge to calculate how much you should pay each month.
But paying more than the minimum monthlypayment, for example, can wind up saving you thousands of dollars.
To illustrate this point, let’s say you have $30,000 in debt at six-percent interest and a 15-year term. If you only make the minimum monthly payment, about $250, you will
end up paying roughly $45,000 ($30,000 for the original loan and $15,000 for the interest). However if you pay an additional $50 each month, not only will you repay the
loan three years faster but you will also only pay back $41,000 in total, saving you $4,000. This savings comes from the fact that you won’t be charged interest on the
additional $50 you pay each month.
There are many other factors to consider when deciding how much to pay each month such as tax incentives, future income and refinancing opportunities. If you do have
student loans I suggest you to go to one of the financial literacy session hosted by the financial aid office. These sessions include talks from Professor Giles Bootheway and
financial aid staff on being financially savvy and student loan management. Contact Jill Rohl-Lampack at jlampack@sbu.edu for more information.
This Week in SIMM
Long Fund: $260,600
Energy Fund: $271,300
GAINERS
Foot Locker (FL) 7.61%
Starbucks (SBUX) 5.11%
McDonalds (MCD) 3.96%
LOSERS
Freeport (FCX) -9.39%
Cheniere Energy (LNG) -6.65%
Teva Pharm. (TEVA) -3.75%
Boeing (BA) -3.60%
Trading Activity
DON’T BUY
Tesla Motors (TSLA),
Tesla Motors designs and manufactures electric vehicles and components. Currently, they only produce 22,000 cars annually, but that number is expected to
dramatically increase. They plan to produce 500,000 electric cars a year by 2020. Tesla announced last week that they will create the world’s largest lithium battery factory,
a factory that will more than double the total worldwide production of batteries. This will dramatically decrease the price the battery, which is an essential step to making
the electric car available for middle-income consumers. Their potential to dominate the electric vehicle market has propelled their stock price 600 percent in just one year.
There are risks, however. They rely heavily on unstable government subsidies, which currently range from $7,500 to $15,000 depending on which state the buyer lives in.
Larger car companies like GM and Nissan are also looking to make a cheap, long-ranged electric car. Tesla has enormous potential to become the largest electric care
marker, but their stock price is too inflated to justify a buy. Our target price of $212 is well below the current price of $240.
Sean Corey is a member of Students in Money Management. His email is coreysm10@bonaventure.edu.