Consolidate grad loan student

Give your graduate some financial tools

This is the season for graduations, caps and gowns, and huge sighs of relief. But whether you're a parent or a graduate, whether it's college or high school graduation, there are some financial issues you need to consider right now.

The first is health insurance.

The day you graduate is likely to be the day you lose your health insurance plan. If you were covered by the school, you're no longer a student -- so no insurance. And once you're no longer a student and older than 21, your parents' health insurance won't cover you either. You may have a job that starts in a few months, and you'll get health insurance there. Or maybe you're job hunting. Either way, you don't want a gap in your insurance coverage.

So go to www.eHealth Insurance.com, and click on the button that says short-term plans. It also has student plans for those still in college but not covered by either parents or the school. The "short term" health plans are designed for people in your situation -- between jobs and with a need for temporary health insurance.

Don't ignore this suggestion. You're in good health now, but the unexpected can always happen. These plans vary in coverage, but what you're really looking for is inexpensive coverage for any catastrophic need -- such as doctor and hospital costs that could arise from a car accident.

Check special deals for grads

Whether you've decided to travel, get a credit card, or buy a new car, many companies are offering special deals for recent college graduates. They figure this is a great time to buy the loyalty of someone hard-working enough to survive the rigors of college.

Auto manufacturers have structured some very attractive deals. Check them out at www.carsdirect.com or www. carsforgrads.com. They reveal discounts such as an extra $500 cash back on certain Nissan models, and $400 extra cash back on some Toyota models. Audi has a very attractive discount for grads who can prove they have a job, and for whom a monthly payment won't take more than 25 percent of their income. Or if you want to lease a car, they'll finance you with a zero down payment.

But don't spend all your money on cars. The most important thing you college grads have to deal with is your student loans.

Consolidate your loans

There's a six-month grace period before you're required to start repaying your federal student loan. But there are some very special deals if you consolidate your loans, and start repayment within 6 months of graduation. If you act promptly, you're entitled to an additional six-tenths of 1 percent discount on your loan rate. And if you agree to an automatic monthly deduction of the payment from your checking account, you'll get an additional quarter-point discount.

If you start the consolidation process now, you'll be ready to make the choice of locking in the current rate of 3.42 percent or the new rate which will be determined by the Treasury bill auction at the end of May. But for now, go to www.SallieMae.com or www.CFSLoans.com to learn about the process of consolidating your loans.

Tips for high school grads

High school graduation is also a moment for financial responsibility. So for you -- or your parents -- here are two graduation gift ideas.

The first is Quicken, the financial planning software that can be installed on your laptop. Then when you open a new checking account at college or keep your old account at home, you can pay your bills online and keep track of all of your spending. Even ATM debits can be downloaded into your Quicken check register. And there's a budgeting and planning tool so you don't spend all your scholarship money in the first month.

Parents who assume their college-age kids can't get credit cards without a parental signature are making a big mistake. On campus, solicitations for credit cards are often made at the same table as sweatshirt sales. If your grad hasn't received a card yet, go to www.VISABUXX.com, where you can apply for a re-loadable debit card. Parents can transfer money to the card, and track spending online. It looks and works just like a credit card but with a dimension of control.

It's great to graduate -- but remember, you're graduating into personal financial responsibility! That's The Savage Truth.

Terry Savage is a registered investment adviser, and appears weekly on WMAQ-Channel 5's 4:30 p.m. newscast. Distributed by Creators Syndicate.