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Through a variety of tools, DigiPen offers information and guidance to students regarding a number of financial topics. Our goal is to help students prepare to manage their finances now and in the future.

Contents


Understanding Credit

Credit allows individuals to borrow money to purchase goods and services when needed, with the agreement to pay it back later, often with a finance charge attached. Consumers use credit to buy almost everything, including food, clothing, housing, and transportation.

Below are the four types of credit:

  • Revolving Credit is a line of credit you can keep using after paying it off. You can make purchases with it as long as the balance stays under the credit limit, which can change over time. Credit cards are the most common type of revolving credit.

  • Charge Cards. While charge cards often look like credit cards, and are used in the same way, charge accounts differ in that you must pay the total balance every month.

  • Service Credit. Your agreements with service providers are sometimes in the form of credit arrangements. You receive electricity, cellular phone service, gym membership, etc., with the agreement that you will pay for them each month. Not all service accounts are reported in your credit history.

  • With Installment credit, a creditor loans you a specific amount of money, and you agree to repay the money and interest in regular installments of a fixed amount over a set period of time. Car loans and mortgages are two examples of installment credit.

Good credit is important! Good credit is necessary if you plan to use credit to make a major purchase, such as a car or a home, or want to be able to take advantage of the convenience credit can provide. The importance of good credit also extends beyond purchases, in that your credit information may be used by potential employers and landlords as part of the selection process.

Credit grantors review credit applications and credit reports to determine financial risk. If they lend you money, extend you credit, or give you goods and services, will you pay them back? They may consider your income, how long you’ve lived at your present address, how long you’ve worked for the same employer, what kinds of assets you have, and the balances of your bank accounts. Often, though, the primary resource guiding their decision is your credit information.


Credit Reports and FICO Scores

Your credit report is what the nationwide consumer reporting agencies use to calculate your credit score, which is used by lenders to determine your credit worthiness. The three major nationwide consumer reporting agencies are Equifax, TransUnion, and Experian. You can receive a free credit report from all three agencies once per year at: https://www.annualcreditreport.com


FICO Score

Credit reports are used to generate a credit score. One of the most commonly used credit scoring formulas is Fair Isaac’s FICO score, which ranges from 300 (low) to 850 (high). The higher your score, the more likely you are to be approved for new credit, or offered a lower interest rate. Many factors from your credit history are used to calculate your FICO score. The nationwide consumer credit agencies don’t disclose how scores are calculated, so no one knows exactly how they are determined. The agencies may have different data on your credit history, so your score can vary between the agencies.

There are several things that can affect your credit score such as:

  • Payment History: Your credit report shows your payment history (on time, late, or missed) for the past seven years.

  • Amounts Owed: Your FICO score looks at the amounts you owe on all types of accounts. For installment loans, such as student loans or auto loans, paying down your loan can help to increase your score. For revolving credit accounts, such as credit cards, your FICO score looks at the total amount you owe as well as your utilization ratio. Your utilization ratio compares the amount you owe on your card to the credit limit on the account. It is a good idea to aim to use 30% or less of your available credit.

  • Credit History Length: A longer healthy credit history can mean a higher score. For this reason, it can be beneficial to keep credit card accounts open even if you don’t use them regularly and don’t have a balance.

  • New Credit: Opening a lot of new accounts in a short period of time can lower your credit score, at least temporarily.

  • Types of Credit Used: Your FICO score considers which types of credit accounts you have experience using. It’s usually best to have both revolving (like credit cards) and installment (like student or auto loans) lines of credit, as long as you are able to manage them.


Hard Inquiries vs. Soft Inquiries

Every time a potential creditor accesses your credit report and score, it’s recorded on your report as a hard inquiry. Too many of these can show potential creditors that you are attempting to open more than one line of credit, and they may choose not to loan you money.

You might also hear about soft inquiries. They occur when your credit report is reviewed when you’re not looking to open new credit lines. Unlike hard inquiries, soft inquiries aren’t considered by lenders when evaluating whether or not to loan you money. Some examples of Soft Credit Inquiries can include:

  • Landlords running credit checks when you apply to rent property.

  • You accessing your own credit report for monitoring.


Good Credit vs. Bad Credit

Having good credit means that you are making regular payments on time, on each of your accounts, until your balance is paid in full. Alternately, bad credit means you have had a hard time holding up your end of the bargain; you may not have paid the full minimum payments or not made payments on time.

Factors that can cause Bad Credit include:

  • Late payments
  • Bankruptcies (these stay on your credit report for 10 years!)
  • Foreclosures
  • Collections

Negative information stays on your credit report for at least 7 years. The good news is that bad credit can always be improved. Practicing good credit habits can raise a low score, as well as help maintain a good score.


Building Credit

If you’re starting from scratch, there are a few ways to build your credit:

  • Open a credit card: As a student, if you are banking with a financial institution, they typically have a student credit card option. While these might not have the best interest rates and credit limits, they are a great resource when you’re just starting to build credit, because they typically have a higher acceptance rate. You can also look into getting a secured credit card. While you do have to pay a deposit for this line of credit, it can be useful in order to take the first step into building credit. No matter what type of credit card you decide on, make sure you do your research on the credit card and know what kind of fees, if any, and interest rates are on the card.

  • Have a joint account or become an authorized user: If you have the resources and someone to help, having a combined account or being authorized on someone’s account who has good credit history is helpful to you. That’s because the payments made on the account can potentially benefit your own credit score, since it shows you are also responsible to payment made to that account.

  • Pay your loans: Making payments on your student or car loans regularly and on time will help boost your credit as well. Showing lenders that you can manage your money and are responsible in making payment will help raise your credit score.

  • Get a secure loan: There are specific loans out there meant to help you build credit. These are loans typically with a deposit and are not meant for long-term use.


Debt Management

Debt is essentially described as a state of being under obligation to pay or repay someone or something in return for something received. In this case, however, it refers to the total sum of all the money you owe. No matter what kind of debt you may be in, it is important to construct a detailed payment plan. The quicker you can pay off your debt, the less interest will accrue.

  • You must recognize that: credit = debt = your obligation to repay

  • Debt can be secured or unsecured

    • Secured debt is backed by an asset such as a car or home. If you do not pay, the lender can take the accompanied asset.

    • Unsecured debt is not backed by an asset, and if you do not pay what you owe, the lender can take you to court and gain possession of comparable assets.

Check out Debt Slapped, a video and website designed to help students graduate with as little debt as possible. Take some time to watch the video for tips and links to resources to help you avoid taking on too much debt.

The National Endowment for Financial Education has a great publication with ideas on how to plan efficiently and avoid excessive debt. Check out 40 Money Management Tips Every College Student Should Know.


Debt/Income Ratio

This helps you to compare the amount of money you owe to the amount of money that you earn. If your debt/income ratio is less than 10%, that means your finances are exceptional. Percentages ranging from 10-20% may indicate that you are financially in a good position, but anything above 20% may mean that you need to re-assess your debt load. If your debt/income ratio is too high, creditors may be less likely to issue you a loan if needed, and interest rates tend to be higher if the loan is approved. Your debt/income ratio can be calculated by following the steps below:

  1. Calculate all monthly debt payments.

  2. Take your gross annual wages and then divide that number by 12 to get your monthly income.

  3. Take your monthly payments and divide it by your monthly income.

  4. Move the decimal point two spots to the right. That number is your debt/income percentage ratio.


Budgeting

How to Design a Budget

Step 1: Evaluate your Income

When compiling your income, include money you earn from work, gifts, scholarships, investment income, and other resources that you consider to be applicable. Keep in mind that not all of your income will come at a regular rate. If you receive money in bulk, such as a $1,000 scholarship, when planning your budget, divide it evenly over the number of months you expect to use that money.

Students should also consider what their income will potentially be down the road. When borrowing and making decisions regarding career paths, it is also important to make sure you will be able to sustain the lifestyle you want after graduation. Future income can have a significant impact on borrowing decisions. Check out the Bureau of Labor Statistics Occupational Profiles information to get an idea of salary outlook information for your chosen profession.

Loans: Although seeing the money come in looks great at first, loans eventually need to be repaid. For the sake of creating your spending plan (budget), consider your loan as an immediate income with a mid- or long-term repayment goal and future fixed or flexible expense. This will help you plan out and disburse your money over a longer period of time.

Balance: If you feel you need to have a job while you’re in school in order to sustain a positive balance, you will first need to determine how many hours you can work while still upholding a good academic standing. As a student, you need to make sure you are succeeding in your classes, and that means you may need to limit your work hours per week. Another option might be to enroll part-time (less than 12 credits), but before making this decision, you should look at where that will put you in your graduation timeline. Consider talking to your academic advisor, and/or schedule an appointment with a financial advisor.

If you currently don’t have income but you plan to in the near future, through work or through financial aid, use this information to prepare for your future and stay ahead.

Step 2: Subtract Your Savings

Pay yourself first! Saving your money means allocating it to reach and attain your goals. Setting aside your money can be helpful for taking care of unexpected immediate needs and emergencies, as well as for achieving short-, mid-, and long-term goals. You will need to distinguish between your long-term and immediate goals and expenses so that you can better prioritize where you are spending your money. You may need to look back at your expenses to determine what you can cut in order to save.

The Washington State Department of Financial Institutions partnered with KCTS9 in constructing helpful videos that walk through key financial strategies, including: How Much is Enough for Retirement?

Step 3: Evaluate Your Expenses

Now you know what’s left of your income after savings and what you can work with or afford for expenses. Start by subtracting your fixed expenses when creating your spending plan (budget), which will provide a visual with how you can live within your means.

There are three different types of expenses:

  • Fixed: These are expenses that don’t change from month to month. This also includes expenses required for survival, such as shelter, emergency funds, health care, transportation expenses, and any child or dependent care.

  • Flexible: These are expenses that vary each month but are also essential for survival, such as food, personal necessities, transportation repair and maintenance, and utilities.

  • Discretionary: These are expenses that generally are non-essential or cost more than necessary. Vacation, gifts, eating out, and self-treatment expenses fall under this category.

Discretionary is the most loosely defined category and will require the most modification based on your own current financial situation; the way you manage it may change over time, but you must be willing to modify it if you want to be financially stable. Although discretionary expenses are the easiest to adjust, others may also be modified, depending on your limitations. For example, you can modify your fixed housing expenses by choosing to live with roommates, taking the bus or train instead of driving your car, or choosing a less expensive cell phone plan.

Needs Versus Wants

Budgeting will help you distinguish your needs and wants, as well as manage the significance and priority of your purchases.

  1. Begin with a list of things you’d like to save up for.

  2. Identify each item as something you absolutely need or something that’s really a want. Be honest with yourself!

  3. Prioritize each item on the list.

  4. Now you can determine whether you should incorporate each item into your budget.

Step 4: Re-Evaluate

If your budget comes out negative, don’t panic! Improvements are constantly made on every budget. Especially if this is your first time creating a budget, you may need to experiment on where you can make adjustments. Try reviewing each expense to make changes applicable to you.

Consider cost-saving ideas such as the following:

  • Pack home-cooked breakfasts, lunches, and dinners instead of buying your meals.

  • Cancel your cable or Netflix/Hulu account.

  • Stop buying things you don’t need.

  • Reevaluate expenses such as cell phone plans, housing expenses, and transportation costs.

Instead of cutting down on your expenses, another option to consider (separate from, or in combination with, making cuts) is to brainstorm ways to bring in more income. A spending diary really comes in handy to record each expense and pinpoint areas in which you could cut back. There are also several mobile applications and software programs (such as Mint or Acorns) to help you keep track of your expenses and income. Keep track and direct your spending habits; try not to let your habits direct you!


Managing Your Budget

Keeping track of your budget can be a lot of work if you don’t organize it well. Consider the following tips to ease the intimidation you may feel when it comes to maintaining your spending plan:

  • Record your actual expenses. This will allow you to look back at what you spent, which is especially helpful if you’re looking to cut down on how much you’re spending.

  • Organize your records. There are many tools to categorize and track what you’re doing with your money, including mobile applications and Excel sheets.

  • Create a routine. If you don’t regularly record your data, it will be easy to get lost in keeping track of where your money went and when. Weekly assessments are a good timeline to start with if you’re unsure; this should be ample enough so that you don’t forget when and where you spent your money. Remember, it will be different for everyone, depending on their schedule. Setting a reminder on your phone or desktop is a helpful accountability tool. You can also talk to others whom you see regularly about your plan so that they can help remind you to keep track.

  • Use an “unusual” category. Not all of your expenses will fit into your previously defined categories. This category includes those occasional expenses. Adding a note to explain deeper what that expense was may be useful.

  • Share your expenses. If you have roommates, discuss a way to split household and other shared essentials to help save money in a way that benefits everyone involved.

  • Little items make a big impact. Is there anything that you tend to buy regularly, knowing it only costs a few bucks? Consider a regular $4 expense, say, every other day for a month. This adds up to $60 in expenses that month. Was it really worth it? Did you really need it? If you find yourself in a similar situation, consider decreasing the regularity of this expense such as — in this example — from every other day to every three days. It may not seem like much, but it’s a start; it also saves you $20 in one month.

  • Make your financial aid credit balance refund last. If your school applies your financial aid towards your tuition and fees and there is money left over, your school will refund that money to you so that you can use it for other academic purposes such as textbooks and transportation. Try to make this money last throughout the semester — instead of spending it all right away — by dividing it evenly and splitting it into intervals as though it were a smaller, regular income.

  • Comparison shop. Compare prices at different resources for the same product so you don’t spend an unnecessary amount of money. As tedious as it may feel at first, you may see significant results over time after creating a habit of doing this.

  • Use credit cards wisely. Do you really need a credit card, or would another payment option work just as well? If you already have one, don’t spend more on it than you can afford to pay in full on a monthly basis. This will help you establish a solid credit rating and avoid financial problems.

The Washington State Department of Financial Institutions’ free “Right on the Money” booklet is a quick-start guide to personal finance for college students. Budgeting, debit, credit, and savings are all discussed, as well as some pointers on how to keep your debt to a minimum. View it online in PDF format.


Money Challenges

Sticking to a spending plan is difficult! The most effective methods for you will depend on what your money challenges are. Here are some tricks to help solve common challenges in order to meet your personal goals and plans:

  • I created a spending plan but accidentally spent beyond it!

    Keep track of what you spend. Tally up your receipts on a regular basis, purchase everything with a debit card if you tend to lose paper receipts, or use a third-party service like www.mint.com.

  • I make too many impulse purchases, even though I know I can’t afford all of them.

    Sometimes it’s more “painful” to spend money when you use cash as opposed to card. If plastic is too tempting, leave it at home and limit the amount of cash you bring with you to spend. Apply a “sleep-on-it” rule and wait at least 24 hours to make a purchase.

  • I just don’t know where my money goes each month!

    The cash envelope system, although it takes more discipline, helps many people avoid confusing their spending and savings goals. Decide how much you want to save and spend, write your intentions on separate envelopes, do the math so you know what amount goes in each envelope per paycheck, and stick to your envelope plan.

  • I struggle whenever an emergency comes up.

    The trick with a super-secret savings account (since it’s not actually a secret to you) is to make it difficult to access. Decide that you will spend only from your checking account. Then automatically direct money into your super-secret savings account and forget about it until you reach your target goal.


Emergency Fund

Regardless of the method you use for your spending plan, nothing can be more important than having an emergency fund. You never know what life will throw at you. Imagine if, all in one day, you lose a source of income, you get sick or injured, your car breaks down, and your pet needs emergency surgery. Having that emergency fund set aside will help the situation feel much less stressful. A basic rule of thumb to start off with is to have three to six months of your fixed, flexible, and discretionary expenses set aside for times like these. If you can establish this as an immediate-term goal and attain it, you’ll be more financially prepared for these tough times.


Banking

A bank is a business that provides clients with information and assistance regarding bank accounts, loans, and debit/credit cards, among many other services. A bank is a trusted and secure place where you can store your money and manage finances. It is important to understand how a bank works so that you are able to utilize it to your greatest benefit.


Banks and Credit Unions

What is the difference?

  • Commercial Bank: A commercial bank offers services to the general public and to companies. They accept deposits, transact withdraws, provide loans, and they may offer basic investment products. They are a for-profit business typically owned by private investors.

  • Credit Union: A credit union is typically a smaller, non-profit financial institution owned by its members. In credit unions, members borrow from pooled deposits at low interest rates. Profits made by credit unions are returned back to the members in various forms such as reduced fees, higher savings rates, and lower interest. Similar to commercial banks, they also provide financial assistance services.

How to Open a Bank Account

After choosing your banking institution, whether it be a commercial bank or a credit union, either go online (as most banks have this option) or go in person and speak with a representative. Typically, you may need your driver license, address, phone number, and Social Security number. There may be other necessary components that you will need to provide, such as a deposit, so a good option is to call ahead and ask in advance.

What to Research Before Opening an Account

  • Minimum balance requirements: Make sure that if your account does require a minimum balance amount, it is something you can maintain. If your account falls below the minimum amount, there may be consequences such as fees or even account closings.

  • Fees: Beware of any fees that may be charged to your account. These fees can come about for various reasons such as falling below the minimum balance, ATM fees, overdrafts, transfers, and much more.

  • Restrictions: It is important to become familiar with any restrictions that your account may have, such as withdraw or transfer limits.

  • Interest: Familiarize yourself with your bank or credit union’s interest rates so that any charges or additions to your account do not come as a surprise.


Checking Accounts

Checking accounts allow you to deposit and withdraw money and make payments with either checks or a debit card. It is important to not spend more than what you have in your account, or else you may get an overdraft fee. With some checking accounts, overdraft protection may be added, allowing funds to be transferred from another related account in order to cover the insufficient portion. It is important to do your research, as there are many different types of checking accounts which may differ in services and traits. Below are brief descriptions for a few of the most common checking account types:

  1. Basic Checking Account: This is an account that is typically used to make purchases or payments for daily necessities and other bills.

  2. Online Checking Account: These accounts forgo any type of physical transaction. They may be similar to a basic checking account (depending on who you bank through), but instead, everything is handled online.

  3. Interest Bearing Account: These are most commonly used for individuals with higher balances in their account. The higher the amount in an interest bearing account, the greater the earned interest rate. Oftentimes, these require you to keep a high minimum balance in your account.

  4. Student Checking Account: Since these accounts are directed towards students, they typically have lower fees, and if there are any, lower minimum balance requirements.


Savings Accounts

These accounts are used to keep money that you would like to set aside for a period of time. In a savings account, the bank will pay interest on the deposited balance. Similar to checking accounts, there are several different types of savings accounts. The most common types are listed below:

  1. Basic Savings Account: These tend to have a reasonable minimum balance requirement and lower interest rate.

  2. Money Market: These accounts generally are a good place to invest your money, because they have lower risk and accrue higher interest. However, they may require a higher minimum balance.

  3. Certificates of Deposit (CD): CDs are another option when deciding where to invest your money while you are saving. These accounts tend to have higher than average interest rates, but there is usually a limitation to how much you are able to withdraw.

  4. Automatic Savings: These accounts automatically withdraw from your checking account and deposit the selected amount into your savings.


Fraud and Identity Theft

Fraud is deliberate deception, and identity theft is when a person illegally uses identifying information of another person, usually to make a financial gain or obtain assets. Oftentimes, those who partake in identity theft and fraud open credit cards, take out loans, and even get in to your already existing savings or checking account. It can be very difficult and time consuming to resolve this issue and get back your credit. Sometimes, it can take months or even years to clear your name.


Most Common Types of Identity Theft/Fraud

  1. Credit Card Fraud: An individual uses someone else’s credit card number for unauthorized purchases.

  2. Employment or Tax-Related Fraud: Someone uses another person’s Social Security number and other identifying information to gain employment or file a tax return.

  3. Phone or Utilities Fraud: A wireless phone or utilities account is opened using another person’s information.

  4. Bank Fraud: The criminal uses another individual’s personal information to open a new account in the victim’s name or take over an existing account that the victim already had.

  5. Loan or Lease Fraud: Stolen personal information is used to obtain a loan or lease.

  6. Government Documents or Benefits Fraud: Stolen personal information is used to obtain government benefits.

Identity Theft Recovery Steps

  • If you notice any unusual charges on your account, contact your financial institution immediately to close or freeze your accounts.

  • Review your credit report to look for any accounts that you may not recognize.

  • File a report with the federal trade commission. As part of this process, you will receive a recovery plan and other forms that can be used to dispute fraudulent charges. Their official website is: www.identitytheft.gov

  • Place a fraud alert on your credit reports. This notifies any institution that may pull your credit report that your identity may be stolen.


How To Help Protect Yourself From Identity Theft

Although there is no real way to tell if you will ever become a victim of identity theft or not, using the following precautions may help keep your information safe.

  • Review banking statements monthly to look for any unusual or unrecognized activity on your account.

  • Have paychecks directly deposited into your account.

  • If possible, avoid giving out identifying personal information via phone or internet.

  • Do not leave mail in an unprotected mailbox.

  • Shred personal documents/billing statements before recycling or throwing them out.

  • Beware of unusual activity around you when using an ATM.

  • Don’t carry your Social Security card with you.


Student Loans and Loan Repayment

Borrowing to go to school can be a daunting prospect, but for students who are responsible and prepared, loans can be a good funding option to help fill the gap between costs and other financial aid. A loan is a borrowed sum of money that must be paid back to a lender, generally with interest. Students who are enrolled in school at least half-time (generally 6 credits) typically have their loans in deferment, meaning they are not required to make payments while in school. When students graduate, fall below half-time, or withdraw from school, the grace period on their loan begins. The grace period is a certain length of time, typically six months, that is free before you must start repaying on your student loans. Interest may accrue on your loan during the grace period, depending on which type of loan you have. Before leaving school, it is a good idea to begin to devise a plan to pay off your loans. Although not required to make payments on your loan during the grace period, you can! As you get close to graduation and repayment, it is a good idea to check in with your lender(s) and servicer(s). The lender is the financial institution that provided your loans, and the servicer is who you will be making your payments to. If you are unsure of who your servicer is, you can log on to the National Student Loan Data System to find out.


Loan Types

There are numerous types of student loans. The most commonly used are:

  • Direct Student Loans (Subsidized vs Unsubsidized)
  • Parent PLUS
  • Grad PLUS
  • Private Loans

Direct Student Loans

Direct Student Loans are also known as subsidized loans and unsubsidized loans. Understanding the difference between the two is essential in making sure you take out the right loan for you. In order to be eligible for a subsidized loan, students must demonstrate financial need through the FAFSA. The amount of subsidized loan a student qualifies for depends on the other financial aid they are awarded. The federal government pays the interest on subsidized loans while you are enrolled in school and then also during your grace period. Unsubsidized loans accrue interest while students are enrolled in school, although no payments are required on these loans until after graduation. Unsubsidized loans are offered to all students who complete a FAFSA, regardless of need or income.

Parent PLUS Loans

The Parent PLUS Loan is available from the Department of Education and allows parents or stepparents of dependent undergraduate students to borrow money in order to put toward their student’s education. In order to borrow the Parent PLUS Loan, parents must complete a separate PLUS Loan application and pass a credit check with the Department of Education.

Grad PLUS Loans

With the Grad PLUS loan, graduate students attending graduate school or professional school are able to take out a loan up to the total cost of attendance for their institution. To be considered eligible, students must complete the FAFSA, meet credit requirements, complete loan counseling, and be enrolled at least half-time (5 credits or more).

Private Loans

Private loans are offered through various private banks and lending institutions. The terms and conditions vary for each different private loan, so it is essential to do your research beforehand. It is also important to note that the loan period must match the DigiPen regular academic term periods in order to be applied.

Loan Amounts and Limits

Visit the Loans section of the DigiPen website for more information on annual and aggregate loan limits for all federal student loans.


Repayment Options

There are numerous loan repayment options available to students. Make sure to do your research to see what repayment options are best for your loan. Below are brief descriptions of repayment options, but it is important to do extensive research before selecting an option.

Standard Repayment - Under this plan, your monthly payments are a fixed amount of at least $50 each month made for up to 10 years (not including periods of deferment or forbearance). This repayment plan saves you money over time because your monthly payments may be slightly higher than payments made under other plans, but you’ll pay off your federal student loans in the shortest time. For this reason, you will pay the least amount of interest over the life of your federal student loan.

Graduated Repayment - Under this plan, your monthly payments start out low and increase every two years for up to 10 years (not including periods of deferment or forbearance). Your monthly payment will always be at least equal to the amount of interest that accrues between your payments and will never be more than three times greater than any other payment.

Extended Repayment - This is a good plan if you need to make smaller payments over a longer period of time as the repayment period can be extended up to 25 years. You must have $30,000 in Direct Loans and have the option of standard or graduated payments.

Pay As You Earn (PAYE) - The Pay As You Earn plan is a repayment plan with monthly payments that are limited to 10% of your discretionary income (the difference between your adjusted gross income and 150% of the poverty guideline amount for your state of residence and family size, divided by 12). To initially qualify for the Pay As You Earn plan, and to continue making income-based payments under this plan, you must have a partial financial hardship (and be a new borrower).

Revised Pay as you Earn (REPAYE) - The Revised Pay As you Earn plan is a repayment plan with monthly payments that are limited to 10% of your discretionary income (similar to the PAYE plan). Any borrower may qualify for this program; you do not need to be a new borrower or have a partial financial hardship to qualify.

Income-Contingent Repayment (ICR) - The Income-Contingent Repayment (ICR) plan is a repayment plan with monthly payments that are the lesser of (1) what you would pay on a 12-year standard repayment plan multiplied by an income percentage factor or (2) 20% of your discretionary income divided by 12. Discretionary income for this plan is the difference between your adjusted gross income and the poverty guideline amount for your state of residence and family size.

Income-Based Repayment (IBR) - Under this plan, the required monthly payment will be based on your income during any period when you have a partial financial hardship. Your monthly payment may be adjusted annually. The maximum repayment period under this plan may exceed 10 years. If you meet certain requirements over a specified period of time, you may qualify for cancellation of any outstanding balance of your loans. If you’re still not sure which payment plan is right for you, these 5 questions may help you get started.


Loan Forgiveness, Cancellation, and Discharge

Some borrowers with certain characteristics, like field of study, profession, location, and income, may qualify for loan forgiveness, cancellation, or discharge. Check out the Federal Student Aid website to learn more about these programs and how you can qualify.


Student Employment

For many students, finding a job is important so that they have an income while going to school. At DigiPen, there are both work-study and non-work-study positions available on campus to students. Employment is a great alternative to borrowing for school, or even an opportunity to pay down your student loans or accrued interest while in school.

Employment is an important resource to consider to help pay for educational costs. Earnings from employment can be a great way to minimize what a student has to pay out of pocket or borrow while in school. Working even part-time can help reduce the amount of total loans borrowed, and speed up how quickly students repay student loans. See DigiPen’s Student Employment Listings for job opportunities on-campus.


State Aid Information

College Bound Scholarship

The College Bound Scholarship Program was established by the Washington State Legislature in 2007. It is managed by the Washington Student Achievement Council (WSAC). The goal of the program was, and is, to provide financial assistance to low-income, middle-school students who have a dream of attaining a college education. For program coverage information, eligibility requirements, and information on how to sign up, visit the Office of Financial Aid.

For any additional information or questions about the College Bound Scholarship Program, please contact the Office of Financial Aid.


Washington College Grant

The Washington College Grant program helps the state’s lowest-income undergraduate students pursue degrees, hone skills, or retrain for new careers. Students can use the grants at eligible institutions in Washington. The Washington College Grant program provides need-based financial aid to income-eligible students pursuing post-secondary education. Eligible students have a household income that is less than 70 percent of the state’s median family income.

For more information regarding eligibility, how to apply, and other general information, please visit ReadySetGrad.

Please visit the Washington College Grant section of the website for more information on how to apply and maintain your eligibility.

Washington College Grant Statement of Educational Purpose

Students who receive the Washington College Grant will need to comply with the conditions below. For questions, or if a student is no longer able to comply with these conditions, contact the Office of Financial Aid.

The State of Washington requires students receiving state aid to review the following conditions each year. By accepting state financial aid, you agree to the conditions listed below:

  1. You must meet the requirements for Washington State residency.

  2. You do not owe a repayment to any federal or state grant or scholarship, nor are you in default on a state or federal student loan.

  3. You must be enrolled in an eligible program and not be pursuing a degree in theology.

  4. If you hold a bachelor’s degree or the foreign equivalent, or in some circumstances if you are pursuing a second associate degree within five years of earning an associate degree, you are not eligible to receive state grant funds.

  5. If you do not attend or if you withdraw from your classes, you may owe a repayment of all or part of any state funds you have received.

  6. You must maintain the academic progress standards established by your institution in order to receive additional state aid.

  7. There could be other circumstances that would require a repayment or reduction in your current award amounts.

  8. You must meet all eligibility requirements for the state aid program(s) awarded.

  9. The offer of this financial assistance is subject to, and conditioned upon, the availability of funds. Washington Student Achievement Council (WSAC) and the institution through which the grant, scholarship, or work-study is awarded, reserve the right to withdraw, reduce, or modify the awards due to funding limitations or due to changes in circumstances which affect your eligibility for the program(s).

Additional Information on the Washington College Grant:

You may choose to voluntarily make financial contributions to WSAC (Washington Student Achievement Council) in recognition of the assistance that you received. All voluntary contributions will be used to provide financial assistance to other students.

If you have questions or find that you cannot comply with these conditions, please contact the Office of Financial Aid.


Additional Resources

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