Student Loans

45-minute agenda

1. 0–5 min

   Warm-up

   Post: “Is borrowing for college “good debt”? What would make it good or bad?”

2. 5–12 min

   Direct instruction

   Present the lesson slides. Make sure students leave with these points:

   • Federal first, private last.
   • Subsidized: no interest in school. Unsubsidized: interest from day one.
   • Capitalized interest grows your balance.
   • Borrow less than your expected first-year salary.
   • Rules change — check studentaid.gov.

   Use the “See it” slide (Total interest on a 10-year loan at a hypothetical 6.5%) to make the idea visual.

3. 12–17 min

   Worked example

   Walk through “Interest while you're in school” on the slides. Pause before the result and ask students to predict it.

4. 17–22 min

   Live demo

   Project student loan calculator from the slides or the Loan Calculator. Change one input at a time and have students call out what they think will happen.

5. 22–32 min

   Borrow Smart

   Format: pairs · 10 minutes

   1. Using the loan calculator at a hypothetical 6.5% for 10 years, pairs find the monthly payment and total interest on $30,000 and on $20,000.
   2. Pairs compare each payment to a starting salary of $45,000 (about $3,750 a month before taxes).
   3. Pairs apply the guideline: borrow less in total than your expected first-year salary.

   What to look for: $30,000: $340.64/month, $10,877 interest. $20,000: $227.10/month, $7,252 interest. Both are under a $45,000 first-year salary, but the lower amount leaves much more room in the budget.

6. 32–37 min

   Check for understanding

   Use the question slides — or run them as a Four Corners game. Answers:

   1. What's a key difference between subsidized and unsubsidized federal loans? — B. With subsidized loans, the government pays interest while you're in school at least half-time.
   2. Why do many experts suggest federal loans first? — A. Federal loans offer fixed rates, borrower protections, and repayment options private loans often don't.
   3. Capitalized interest is added to your loan balance, so you then pay interest on it. — True
7. 37–42 min

   Discussion

   • How would you decide how much is too much to borrow for college?
   • Should colleges be required to show expected graduate salaries next to their prices?
8. 42–45 min

   Exit ticket

   Prompt: What's the difference between subsidized and unsubsidized federal loans?

   Answer: Subsidized loans don't charge interest while you're in school (at least half-time); unsubsidized loans charge interest from day one.