SEE MORE INSIDE

Car Buying 101: Zero Percent Financing Versus Rebate

PAGE

03

President/CEO Letter

PAGE

04

1 | STANDARDS OF ETHICAL CONDUCT

Published quarterly by Parsons Federal Credit Union 100 West Walnut Street Pasadena, CA 91124

For questions or comments about

this newsletter, please contact

marketing@parsonsfcu.com 626.440.7000 • 800.765.4527

www.parsonsfcu.orgMailing address P.O. Box 90667 Pasadena, CA 91109-0667

4 | Parsons Federal Credit Union

Your savings are insured up to $500,000 through a combination of federal insurance by the National Credit Union Administration, a U.S. government agency, and private insurance by American Share Insurance.

PATHFINDERJuly 2020

Uniquely par tnering to make life’s journey easier.

For many students in America, getting adequate financial support

for a college education can be difficult. Borrowing money has

become the go-to solution for funding, especially because most

families cannot cover all of a student’s expenses. So, what should

you do when you find yourself in this situation?

The good news is that every family can develop its own strategy to pay for college, one that reduces reliance on student loans and also reduces overall cost of an education. You can start thinking about what works for you by answering the following three questions.

Cont'd on next page

THREE QUESTIONS TO ANSWER BEFORE TAKING OUT STUDENT LOANS

PRESIDENT/CEO LETTERNormally at this time of year, I like to wish our members a happy, fun-filled summer. However, given the current environment, I understand many of you have had to halt your vacation plans and focus on keeping yourself and your loved ones safe and healthy. COVID-19 has forced most businesses to make major adjustments on how they serve their customers. Fortunately for Parsons FCU,

we have been serving our members across the globe virtually for many years; with more than 98% of our banking transactions done electronically and over the phone, we are well-equipped to continue business operations uninterrupted.

We received more than $9 million in additional deposits during the first 60 days of the COVID-19 pandemic. Our goal is to provide financial peace of mind for our members—so thank you for entrusting us with your hard-earned dollars. With more than 70% more capital than what is required by our federal regulators, a BauerFinancial 5-Star rating, and $500,000 of deposit insurance per account, we are committed to safeguarding your funds and providing financial relief to members.

During the first few weeks of the crisis, we quickly introduced several initiatives such as waiving all non-sufficient funds fees, enacting our emergency loan program, lowering transaction requirements for Kasasa Checking rewards, and providing numerous loan modifications to help impacted individuals. Many large banking institutions discontinued providing home equity loans during this time, but we recognized this was when our members needed them the most. I am proud of the fact that we are actively continuing to offer our full loan program.

I would like to thank our staff for their diligence and quick adoption of working remotely from the office. To ensure their safety and ability to maintain operations, we divided our staff into two teams, alternating each weekly. Their flexibility and commitment to maintaining high service levels during this time are a testament to their dedication to help make your life’s journey easier. I sincerely thank you for entrusting us with your business and wish you and your family good health and safety during this time.

Warmest Regards,

Ray Crouse President/CEO Parsons Federal Credit Union

Ray Crouse

Federally insured by the NCUA

2 | Parsons Federal Credit Union Parsons Federal Credit Union | 32 | Parsons Federal Credit Union

CAR BUYING 101: ZERO PERCENT FINANCING VERSUS REBATESo, you’re ready to buy a car and the dealership offers

you zero-percent financing. Sounds great, right? What

you may not know is that you could be missing out on a significant rebate on your purchase.

We’re here to help you figure out which decision is better

for your financial situation. Zero-percent financing reduces

the monthly payments on an auto loan because you’re

not paying interest. But a large rebate can provide a big

portion—or even all—of a down payment. Rebate amounts

vary, but they usually range between $1,000 and $3,000.

The first thing to note is that not everyone qualifies for

zero-percent financing. Qualifying for it mainly depends

on your credit and how much cash you’re putting down.

It’s a good option if you meet the criteria and have to

finance. Even if you don’t have to finance, it can allow

you to invest the cash while making interest-free monthly

car payments.

However, if you’re eligible for a rebate, the rebate can

be credited toward the purchase price and might even

be large enough to cover the entire down payment. The

vehicle price, the amount of the rebate, and the interest

rate you’ll be paying are factors you must consider when

making your decision.

Here’s one example (below/to the right). Say you buy

a $23,500 car and put no money down. The dealership

offers a 60-month loan with the option of a cash rebate

or zero-percent financing. With that financing, even

though you don’t pay interest on the loan, you end up

with a higher monthly payment, and you pay $780 more

over the life of the loan because you borrow more money.

If you want to expand your car-buying payment

options, consider an auto loan from Parsons FCU. With

competitive rates and flexible terms, you can find the

perfect vehicle for your budget. To learn more, visit our

website at www.parsonsfcu.org.

The article “Take the rebate or zero percent auto loan?” originally appeared on BankRate.

Are you being flexible enough in your college selection?

If your child insists on going to a particular school, finding an affordable way to fund higher education can be challenging. The more flexible you are in the selection process, the greater the opportunity to reduce your need for student loans.

Begin by researching schools to determine where your child will be a good fit and how their academic profile compares with those of current students. Edmit Plus, a new college financial tool that is free for Parsons FCU members, will take into account your student’s GPA, test scores, household income, and major of study to estimate the potential aid they could receive from the school. If a school finds your child academically desirable, he or she is more likely to be accepted and awarded financial aid in the forms of grants and scholarships. This resource also helps provide approximate monthly cost for attending that particular school.

Community colleges are also an excellent option because they can offer quality education and flexibility at a fraction of the cost of most other schools.

How will your selected schools assess your finances for aid purposes?

After you find schools where your child will likely be accepted, you will need to determine your eligibility for financial aid. Colleges use one of two aid applications, the Free Application for Federal Student Aid (FAFSA) or the CSS Profile.

Each application has its own aid methodology that produces your expected family contribution (EFC).

Your EFC is the minimum amount that you will be expected to contribute each year toward your child’s education. Two schools might produce a dramatically different EFC, so it’s important to do research and determine beforehand what your EFC will be. The cost of attendance minus your EFC will produce the amount of need-based financial aid, if any, that you qualify for. You can easily view your EFC as a handy breakdown when you’re researching colleges on Edmit Plus.

What financial return can you expect from obtaining your degree?Not all gains can be measured in dollars, but for now let’s focus on the financial aspect of the return on your investment in your education. Although earning a degree can open the door to more career opportunities and greater income, there are a number of caveats.

College is an investment and, like any other investment, you have initial costs. Keeping your upfront costs to a minimum can help boost your return.

After you confirm your initial costs, you can calculate a future salary based on your degree. PayScale offers salary projections for specific majors and offers a return-on-investment calculation based on future income and college costs. Students pursuing advanced degrees might have greater upfront costs, but their starting salaries after graduation could justify the expense.

Almost anybody can qualify for student loans nowadays, regardless of their credit score or future income potential. For this reason, many students neglect to consider their ability to pay them off or fail to consider the impact they can have on meeting their goals. Be proactive, establish a college planning strategy, start saving early, and make education your greatest investment.

Begin by looking into lower-cost federal student aid options such as the FAFSA and by researching various scholarships your student can apply for. After you’ve exhausted all these lower-cost options, you can start to consider private student loans, such as In-School Student Loans from Parsons FCU. To learn more about our Student Lending program, including Edmit Plus and Student Loan Refinancing, visit our website at www.parsonsfcu.org/student-lending.

The article “3 Questions to Answer Before Taking out Student Loans” originally appeared on NerdWallet.

1

2

3

Option 1:Cash rebate

Option 2:Zero-percent refinancing

Cash rebate $2,000

Total borrowed(purchased price minus rebate) $21,500 $23,500

Interest rate 2.19% 0%

Monthly Rebate $379 $392

Total you pay $22,740 $23,520

2 | Parsons Federal Credit Union Parsons Federal Credit Union | 32 | Parsons Federal Credit Union

CAR BUYING 101: ZERO PERCENT FINANCING VERSUS REBATESo, you’re ready to buy a car and the dealership offers

you zero-percent financing. Sounds great, right? What

you may not know is that you could be missing out on a significant rebate on your purchase.

We’re here to help you figure out which decision is better

for your financial situation. Zero-percent financing reduces

the monthly payments on an auto loan because you’re

not paying interest. But a large rebate can provide a big

portion—or even all—of a down payment. Rebate amounts

vary, but they usually range between $1,000 and $3,000.

The first thing to note is that not everyone qualifies for

zero-percent financing. Qualifying for it mainly depends

on your credit and how much cash you’re putting down.

It’s a good option if you meet the criteria and have to

finance. Even if you don’t have to finance, it can allow

you to invest the cash while making interest-free monthly

car payments.

However, if you’re eligible for a rebate, the rebate can

be credited toward the purchase price and might even

be large enough to cover the entire down payment. The

vehicle price, the amount of the rebate, and the interest

rate you’ll be paying are factors you must consider when

making your decision.

Here’s one example (below/to the right). Say you buy

a $23,500 car and put no money down. The dealership

offers a 60-month loan with the option of a cash rebate

or zero-percent financing. With that financing, even

though you don’t pay interest on the loan, you end up

with a higher monthly payment, and you pay $780 more

over the life of the loan because you borrow more money.

If you want to expand your car-buying payment

options, consider an auto loan from Parsons FCU. With

competitive rates and flexible terms, you can find the

perfect vehicle for your budget. To learn more, visit our

website at www.parsonsfcu.org.

The article “Take the rebate or zero percent auto loan?” originally appeared on BankRate.

Are you being flexible enough in your college selection?

If your child insists on going to a particular school, finding an affordable way to fund higher education can be challenging. The more flexible you are in the selection process, the greater the opportunity to reduce your need for student loans.

Begin by researching schools to determine where yourchild will be a good fit and how their academic profile compares with those of current students. Edmit Plus, anew college financial tool that is free for Parsons FCU members, will take into account your student’s GPA, test scores, household income, and major of studyto estimate the potential aid they could receive fromthe school. If a school finds your child academicallydesirable, he or she is more likely to be accepted and awarded financial aid in the forms of grantsand scholarships. This resource also helps provide approximate monthly cost for attending that particular school.

Community colleges are also an excellent option because they can offer quality education and flexibility at a fraction of the cost of most other schools.

How will your selected schools assess your finances for aid purposes?

After you find schools where your child will likely be accepted, you will need to determine your eligibility for financial aid. Colleges use one of two aid applications, the Free Application for Federal Student Aid (FAFSA) or the CSS Profile.

Each application has its own aid methodology that produces your expected family contribution (EFC).

Your EFC is the minimum amount that you will be expected to contribute each year toward your child’s education. Two schools might produce a dramaticallydifferent EFC, so it’s important to do research and determine beforehand what your EFC will be. The cost of attendance minus your EFC will produce the amountof need-based financial aid, if any, that you qualify for. You can easily view your EFC as a handy breakdownwhen you’re researching colleges on Edmit Plus.

What financial return can you expect from obtaining your degree?Not all gains can be measured in dollars, but for now let’s focus on the financial aspect of the return on your investment in your education. Although earning a degree can open the door to more career opportunities and greater income, there are a number of caveats.

College is an investment and, like any other investment,you have initial costs. Keeping your upfront costs to aminimum can help boost your return.

After you confirm your initial costs, you can calculate a future salary based on your degree. PayScale offers salary projections for specific majors andoffers a return-on-investment calculation based on future income and college costs. Students pursuing advanced degrees might have greater upfront costs,but their starting salaries after graduation could justify the expense.

Almost anybody can qualify for student loans nowadays, regardless of their credit score or future income potential. For this reason, many students neglect to consider their ability to pay them off or fail to consider the impact they can have on meeting their goals. Be proactive, establish a college planning strategy, start saving early, and make education your greatest investment.

Begin by looking into lower-cost federal student aidoptions such as the FAFSA and by researching various scholarships your student can apply for. After you’ve exhausted all these lower-cost options, you can startto consider private student loans, such as In-School Student Loans from Parsons FCU. To learn more about our Student Lending program, including Edmit Plusand Student Loan Refinancing, visit our website at www.parsonsfcu.org/student-lending.

The article “3 Questions to Answer Before Taking out Student Loans” originally appeared on NerdWallet.

1

2

3

Option 1:Cash rebate

Option 2:Zero-percent refinancing

Cash rebate $2,000

Total borrowed(purchased price minus rebate) $21,500 $23,500

Interest rate 2.19% 0%

Monthly Rebate $379 $392

Total you pay $22,740 $23,520

SEE MORE INSIDE

Car Buying 101:Zero PercentFinancing VersusRebate

PAGE

03

President/CEO Letter

PAGE

04

1 | STANDARDS OF ETHICAL CONDUCT

Published quarterly by Parsons Federal Credit Union 100 West Walnut Street Pasadena, CA 91124

For questions or comments about

this newsletter, please contact

marketing@parsonsfcu.com 626.440.7000 • 800.765.4527

www.parsonsfcu.orgMailing address P.O. Box 90667 Pasadena, CA 91109-0667

4 | Parsons Federal Credit Union

Your savings are insured up to $500,000 through a combination of federal insurance by the National Credit Union Administration, a U.S. government agency, and private insurance by American Share Insurance.

PATHFINDERJuly 2020

Uniquely par tnering to make life’s journey easier.

For many students in America, getting adequate financial support

for a college education can be difficult. Borrowing money has

become the go-to solution for funding, especially because most

families cannot cover all of a student’s expenses. So, what should

you do when you find yourself in this situation?

The good news is that every family can develop its own strategy to pay for college, one that reduces reliance on student loans and also reduces overall cost of an education. You can start thinking about what works for you by answering the following three questions.

Cont'd on next page

THREE QUESTIONS TO ANSWER BEFORE TAKING OUT STUDENT LOANS

PRESIDENT/CEO LETTERNormally at this time of year, I like to wish our members a happy, fun-filled summer. However, given the current environment, I understand many of you have had to halt your vacation plans and focus on keeping yourself and your loved ones safe and healthy. COVID-19 has forced most businesses to make major adjustments on how they serve their customers. Fortunately for Parsons FCU,

we have been serving our members across the globe virtually for many years; with more than 98% of our banking transactions done electronically and over the phone, we are well-equipped to continue business operations uninterrupted.

We received more than $9 million in additional deposits during the first 60 days of the COVID-19 pandemic. Our goal is to provide financial peace of mind for our members—so thank you for entrusting us with your hard-earned dollars. With more than 70% more capital than what is required by our federal regulators, a BauerFinancial 5-Star rating, and $500,000 of deposit insurance per account, we are committed to safeguarding your funds and providing financial relief to members.

During the first few weeks of the crisis, we quickly introduced several initiatives such as waiving all non-sufficient funds fees, enacting our emergency loan program, lowering transaction requirements for Kasasa Checking rewards, and providing numerous loan modifications to help impacted individuals. Many large banking institutions discontinued providing home equity loans during this time, but we recognized this was when our members needed them the most. I am proud of the fact that we are actively continuing to offer our full loan program.

I would like to thank our staff for their diligence and quick adoption of working remotely from the office. To ensure their safety and ability to maintain operations, we divided our staff into two teams, alternating each weekly. Their flexibility and commitment to maintaining high service levels during this time are a testament to their dedication to help make your life’s journey easier. I sincerely thank you for entrusting us with your business and wish you and your family good health and safety during this time.

Warmest Regards,

Ray Crouse President/CEO Parsons Federal Credit Union

Ray Crouse

Federally insured by the NCUA