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Please Silence Your Cell Phones!Thank you for being considerate to the people around you.Fran C. McKeownHigher Education Access Partner Southeast Region of PAfmckeown@pheaa.orgYour PresenterFinancial Aid 101Paying for Postsecondary Education3Know where the money comes from and how you apply for it File the FAFSAKnow your DEADLINESBe a Smart Consumer

Things to take away4What is Financial Aid? Financial aidconsists of funds provided to students and families to help pay for Postsecondary Educational expenses

POST SECONDARY all Department of Education eligible schools past high school could be 4 year, 2 year, community college, trade, technical, nursing schools - that are recognized by the DOE which are the majority of your institutions.

IF I say College, its habit but the options were discussing tonight are eligible at all eligible post secondary schools.

5Federal GovernmentState GovernmentSchool/Colleges

Private Scholarship Sources:HS CounselorsClubs and organizationsEmployersInternet scholarship searchesWhere Does the Money Come From?Merit-Based Aid scholarships usually based on:- academic ability, special talent or achievement, program of study, family or ethnic background

Gift Aid FREE MONEY (grants and scholarships)-Need-Based Aid (usually based on - income, assets, other factors)

Self Help Aid strings attached-Loans and work programs

Types of Financial Aid7Joint responsibility of the student and parent(s) to pay, to the extent possible

Need-based financial aid subjected to federal formula to determine financial need

Not all families qualify for need-based aid. There is no guarantee that you will get any free money to pay for higher educationBasic Principles8Financial Aid 101FORMSCollege Fund9FAFSAFree Application for Federal Student Aid FAFSA is the primary means of filing for financial assistance to attend postsecondary school

A Federal form used to determine:Expected Family Contribution (EFC), Need and Eligibility for:

Federal programs (Pell Grants, Work-study, Student Loans)

State programs (PA State Grant, State Work-Study and other special programs)

School programs (Need-based grants and scholarships)

Must file a FAFSA to be eligible for these programs each year a student attends school

A standard form that collects demographic and financial information about the student and family

Information used to calculate the Expected Family Contribution or EFC - The amount of money a student and his or her family may reasonably be expected to contribute towards the cost of the students education for an academic year

DONT use FAFSA.com, FAFSA.net - those are copycat programs that want to charge you for what you can do FREE. Dont Pay!!

Srs 2012/13 Jr.s not yet, good info.

Online coded areas - Purple for Parent info P P Blue for student.

Remember to use the PARENTs EMAIL , not the students email twice or a school email or you wont get your students information!If student misses info sent to them, youll miss it too10Applying for Financial AidKnow what Financial Aid Forms your School RequiresFAFSA (Free Application for Federal Student Aid) REQUIRED FOR: Federal Aid, PA State Grant, College Aid and some Private Scholarships STATE GRANT FORM (SGF) Required for First Year Students and may be requested for subsequent years.

CSS PROFILE Form Required for some postsecondary schools and scholarship organizations

INSTITUTIONAL AID Forms Internal forms at the school

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FAFSA Confirmation PageStart your state application to apply for Pennsylvania state based financial aidApply for your State Grant From the FAFSA ConfirmationPageCLICK HERETRANSFERS FOTW data to the State Grant ApplicationOnline State Grant ApplicationAdditional questions needed to determine PA State Grant eligibilityenrollment status (full time/part time)value of PA 529 College Savings Programprogram of study for students in vocational programsemployment status

Link off the FAFSA Application CONFIRMATION Page!

Students will be able to view their status on Account Access available at pheaa.org about three days after completing the FOTW.

Missed the link or it wasnt available?Link in an email sent to student/parent from PHEAAGo to PHEAA.org; State Grant Program; Complete Form

Help screens are available for all questions

LINK at the end of the FAFSA on confirmation page - click and about 8 questions to complete .

529 savings are BACKED OUT of Income for PA grant purposes not penalized.IF you dont - PHEAA will contact you and advise you to set up an Account Access - REF BOOKMARK

MUST PRINT SIGNATURE PAGE and MAIL no electronic signatureyetTo complete the PA State Grant Form online, students need to:Sign in or create an account with PHEAA at www.pheaa.org. (Note: this will default to www.aessuccess.org, the website for American Education Services).Provide PHEAA with additional information needed to process the PA State Grant application for consideration. Print, sign, and mail the PA State Grant Certification form to PHEAA to complete the process.

If the student does not respond to the email by setting up an account, PHEAA will mail the State Grant Form to the student to be completed, signed and mailed back. Set up an account and complete the form. Must be complete before any state grant funds will be disbursed to students.

13All Done.. After mailing!

Print & MailYou MUST print, sign and mail in the Grant Confirmation Page to complete the process.When and How to Apply The FAFSA may be completed anytime on or after January 1 of the upcoming Award YearFor 2013/2014 that would be Jan. 1, 2013Will be rejected if you apply BEFORE Jan 1

Two ways to complete the FAFSA:

ONLINE at www.FAFSA.Gov (NOTE: .GOV )Safe, Secure, Fast, Skip Logic, Built In EditsFAFSA on the Web Worksheet (optional)FAFSA 4Caster, to practiceprint the confirmation page when complete

Paper FAFSA (slow.)call 1-800-433-3243download PDF at www.fafsa.gov

Page 10 PA Student Aid GuideThe FAFSA is used to determine student eligibility for many need based programs. Federal programs such as Pell Grants, work study and student loans. State Programs such as the Pennsylvania State Grant , state work study and other special programs. School Programs such as need based grants and scholarships.

Remember EACH FAFSA is UNIQUE TO THAT FAMILY cant compare to your neighbor, friends, sisters kids - since each persons information is unique and is calculated based on them! You can do a worksheet first, then complete.

Students may list up to ten schools on their online FAFSA and need not be accepted for admission at the time of FAFSA submission. You should check with each school that you apply to and see what is their deadline date that they need you to complete the FAFSA.

FAFSA on the web is the preferred and most popular method for submitting the FAFSA. Online applications are processed faster, are more accurate and are easier to correct. Only incudes basic questions due to Skip Logic The application is available in English and Spanish.

The FAFSA on the web worksheet can be used to gather certain pieces of information before going online to complete the actual form. This worksheet is optional and you are not required to complete it.

15Know all of your state and school/college deadlines and file the FAFSA by the earliest deadline.

Federal Deadline - end of the award year - for 2013-2014, this would be June 30, 2014

PA State Grant deadlines May 1, 2013 - First Time and Renewal Applicants that plan to enroll in a degree program or a college transferable program at a junior college or other college or universityAugust 1, 2013 - First Time applicants that plan to enroll in a community college; a business, trade, or technical school; a hospital school of nursing; or a 2-year program that is not transferable to another institution

Know School Deadlines

Know Your Deadlines!!!!!16www.FAFSA.GOV

New FAFSA EntryRenewal Application EntryFAFSA CorrectionsProviding SignaturesContinuing a Saved FAFSAViewing Transaction HistoryPersonal Identification Number (PIN)Sign FAFSA electronicallyNot required, but speeds processing

Website: www.pin.ed.gov

BOTH Student and one Parent sign electronically with PINCreate your own PIN or have one assigned

Do NOT lose it. Write it down and store in a safe placeDo NOT share it with anyoneLinks for PIN are within the FAFSA form too

MUST have a PIN to complete student and parent.A pin is used to electronically sign the FAFSA when filing on-line.

The PIN enables an applicant to sign their application on FOTW, provides access to check on their FAFSA status, and is used to sign corrections made on FOTW. Also, the PIN is used to sign the master promissory note (MPN) for student loans and is used by students to review their federal student aid history within the National Student Loan Data System at www.nslds.ed.gov. A pin is used to electronically sign the FAFSA when filing on-line.

The student needs his/her own PIN and uses the same PIN as long as they are attending school.

One parent of a dependent student needs a PIN and uses the same PIN for all children attending any post secondary institution. Dont need a separate PIN for each child in school DO need separate FAFSAs, but will be given opportunity on FAFSA to continue for another child

The student and parent should go to www.pin.ed.gov to choose a pin or they may have one assigned to them. Students and parents may apply for a pin any time during the students senior year of high school. They may also apply for a PIN at the time of completing the FAFSA.

The parent PIN allows a parent of a dependent student to sign the FAFSA electronically. It also is used by parent borrowers to sign the Direct PLUS Loan MPN.

Without a pin, an applicant must print off a signature page, sign it, and mail it to the federal processor, which delays the processing by several weeks.

18Dependent Student and Parent(s) - yes- Independent student only their info (& Spouse) Divorced or separated parents (the parent that provides more than 50% of students support) - yes Stepparents - yes Adoptive parents - yes Foster parents - no Legal guardians - no Anyone else the student is living with - noWhose Information Goes on the FAFSA24 or older on Jan 1st of award year (January 1, 1990)Veteran (includes active duty personnel)Working on graduate level degreeEmancipated minor in legal guardianshipOrphan, in foster care, or ward of the court at anytime when student was age 13 or olderHave legal dependents other than spouseStudent deemed homeless by proper authorityWho is independent?Applicants may need the following items:

Social security numbersDrivers license (student only; this information is optional)Federal income tax returns (1040, 1040A or 1040EZ)W-2 forms from all employersCurrent bank statements (checking and savings)Current business and farm recordsRecords of any stocks, bonds and other investments, including 529 accountsAdditional untaxed income tax records may be needed such as: Veterans non educational benefits, child support paid/received and workers compensation. Alien registration or permanent resident card (if not a US citizen)

Documents Needed to Complete the FAFSAFAFSA TIPS Dont mix answers for student and parent information Ensure SSN accuracy Gender question is optional answer it! Have federal income tax and other related information as references. Its OK TO ESTIMATE if taxes arent filed yet Updates/Corrections can be done later with IRS Data Retrieval Tool

Dont delay22The IRS Date Retrieval Tool allows students and parents to access IRS tax return information needed to complete the FAFSA. Students and parents may transfer the data directly into their FAFSA.

IRS Data is available:After 2 weeks of electronically filing federal tax returnAfter 8 weeks of filing a paper federal tax return

If use estimated income to complete FAFSA, can go back once taxes are filed and use IRS Data Retrieval Tool.

IRS DATA Retrieval Tool IRS Data Retrieval

ALSO in Student Section if student is filing taxes24Special CircumstancesIf things change. Recent divorced or separated parents Recent death or disability Reduced income

Contact the school and ask for a special consideration AND Contact State Grant Division at PHEAA

Since the FAFSA is a federal form used by millions of students nationwide, it is not feasible for the FAFSA process to take unusual circumstances into account. Therefore, schools have Professional Judgment which enables them, on a case by case basis, to make changes to the students FAFSA record and financial aid eligibility.

This authority rests with each school; decisions made by one school do not apply to another. In addition, the Financial Aid Officers professional judgment applies to federal aid only. For consideration of special circumstances for PA State Grant, students must contact PHEAA directly and complete the appropriate review process

At the time of filing the FAFSA, if the parents are divorced or separated, the parent is considered to be the one which the student lived with more (51% of the time or more) in the past 12 months. If parents divorce after the FAFSA is filed, the student needs to contact their financial aid office at their college to see how this will impact their financial aid.

Reduced Income: Many families experience a change in their income, either before or after the FAFSA has been filed. It is important that they file the FAFSA based on actual data and then contact their Financial Aid Office to discuss what has changed. Likewise, anything that occurs after the FAFSA is actually filed, such as a loss of a parents job, death of family member, or other circumstance that impacts the family financially, should be reported to the financial aid office at the college that the student will attend. The financial aid staff may advise the student to report this change in circumstances to PHEAAs state grant division as well.

25Financial Aid 101Financial Aid Forms are Filed Whats Next?After the FAFSA.

Department of Educations Central Processing System uses the information to calculate and create your Need Analysis

Expected Family Contribution (EFC) is determinedStudent Aid Report or Acknowledgment sent to student (review and make necessary corrections)Information is sent to schools/colleges listed on the FAFSA, and to PHEAASchools listed on FAFSA will send financial aid award letters upon acceptanceCompare award lettersDetermine true cost of school

Page 11 PA Student Aid GuideWhat is Need Analysis?Schools use SAR calculations to determine a students financial need through a process called need analysis

Need analysis has two componentsThe students Cost Of Attendance at the chosen institution The students Expected Family Contribution (EFC).Whats the cost to attend here, and how does your EFC factor into calculations for internal and federal aid the school offers to help you pay for college.28 The EFC is a number derived from a federal formula which considers a familys income, assets, and other factors when determining what a family can reasonably be expected to pay each year. Although, it is NOT the amount you will pay each year.

Parent contribution + student contribution = EFCBulk of EFC comes from incomeHome, personal property, qualified retirement funds, and value of life insurance is excluded from assetsAsset protection allowance (based on age of older parent, or the parent if single parent household)Student income contribution = 50% of amount over $6,130Student asset contribution = 20% of assetsParent contribution divided by number of children in college at the same time How is the EFC calculated?Expected Family ContributionEFC is a number to determine what you might be eligible for in student aid.29Cost of Attendance The Financial Aid Office will include the Direct Costs and Indirect Costs in determining the students annual cost of attendance at that school:

Direct College Costs Indirect College CostsTuition -> TransportationRequired Fees -> Personal expensesRoom -> Dependent care expensesMeals Books and Supplies

Page 7 PA Student Aid GuideAt each school that you apply to, your EFC will remain the same but your cost of education will be different. Schools may consider both direct costs, charged by the school and indirect costs, that the student pays outside of school.

Costs vary greatly from school to school. In evaluating college costs, students must be sure to compare similar expenses. They should not consider tuition and fees only at one school and all costs at another school.

In preparing to meet the cost of attendance, families should distinguish between direct costs to be paid to the institution (tuition and fees, room and board, books and supplies) and those indirect costs over which they may have more control (transportation costs and personal expenses).

30School costs include:Tuition and feesRoom and boardBooks and suppliesTransportationMiscellaneous living expensesChild care, if necessary

What School Costs are Considered?In most cases, you WILL have to pay for educational expenses. This is your ACTUAL family contribution, or AFC. You have three ways to cover your share:

Yesterdays money SAVINGS have you been able to save?

Todays moneyINCOME is anything left at the end of the month?

Tomorrows moneyLOANS how much can you afford to borrow?

How will you cover the cost??Schools/colleges receive financial aid information and calculate financial need School cost. $26,000 EFC.. - 3,000 Financial need $23,000

Financial Aid Office (FAO) packages student based on financial need and available funding (varies from school to school).

Financial aid award letter sent to student.Calculating Financial NeedPackaging ExampleCost $15,000 $25,000 $45,000EFC $ 3,000 $ 3,000 $ 3,000Need $12,000 $22,000 $42,000

Free Money $ 6,000 $ 8,000 $18,000Loans $ 5,500 $ 7,000 $ 8,000Work $ 0 $ 2,000 $ 3,000Total Aid $11,500 $17,000 $29,000

Gap (Cost Aid) $ 3,500 $ 8,000 $16,000

Actual Cont.(Cost Free Money) $ 9,000 $ 17,000 $27,000

34Financial Aid Award Letter Is an official notification from the School about financial aid, terms, and conditions

Lists the type and amount of each award to be received

Describes what must be done to accept or reject any award

Discloses students rights, responsibilities, and academic requirements.

Page 14 PA Student Aid GuideThe student will receive a financial aid award letter from all the schools that you made application to for financial aid and admission. Read this information very carefully. If you do not understand the information, contact the financial aid office at your school with your questions.

Please contact your schools financial aid office if a tax transcript is not available

35After reviewing their packages, students should be sure they know and understand the following:How much of the financial aid is free money? Which awards are based on need, and which are based on merit?Are there any conditions on the free money; in particular, is there a GPA requirement?Will awards change from year to year?Will institutional awards increase as tuition increases?Will loans be needed? If so, how much?

Reviewing the Financial Aid PackageFinancial Aid 101Federal, State and College Financial Aid ProgramsPell Grant .... up to $5550 (2012-13) Amount determined by Need Calculations and awarded to most financially needy students

Campus-based aid amounts determined by FAOFSEOG up to $4000Perkins Loan .... up to $5500 (fixed 5% interest rate) Federal Work Study FAO determines

For most programs, student must be enrolled at least half-time and meet satisfactory academic progress.

Federal ProgramsPage 22; PA Student Aid GuidePell grant is limited to 12 semesters (or its equivalent).

the maximum Pell Grant eligible EFC for 2012-2013 is 4995 38Federal ProgramsTEACH Grant up to $4000 Grant becomes a loan if teaching commitment is not met.

Iraq and Afghanistan Service Grant

DEA (US Dept of Veterans Affairs, Dependents Education Assistance)

Vocational Rehabilitation Program (students with disabilities)

Americorps (for details, go to www.americorps.gov)Page 22 PA Student Aid GuideThe Teacher Education Assistance for College and Higher Ed Grant is available to students who plan to enroll in coursework required to become a teacher. In general, Participating students must annually sign an agreement to teach full-time in a high need field in a public or private elementary or secondary school that serves low-income students. - Grant is $4,000 per year but must be repaid as a loan if student fails to meet the requirements.

Iraq and Afghanistan Service Grant - A student whose parent or guardian was a member of the U.S. Armed Forces and died as a result of service performed in Iraq or Afghanistan after September 11, 2001 may be eligible to receive the Iraq and Afghanistan Service Grant.

Additional Student Eligibility Requirements - Must be ineligible for a Federal Pell Grant due only to having less financial need than is required to receive Pell funds, and - Be under 24 years old, or - Enrolled in college at least part-time at the time of the parents or guardians death.

The grant award is equal to the amount of a maximum Pell Grant for the award year not to exceed the cost of attendance for that award year

Americorps is an opportunity for students to work and thus, earn educational awards to pay for school or to repay students loans.

39PA State Grant* Full-time, in PA....up to $4,348Part time, in PAup to $2,174

Out of state.. Up to $600 in CT, DE, MA, OH, RI, VT, WV, and DC

All other states.up to $400 (NJ, NY, and MD = $0)

Amount determined in part by the cost of the school

* Must be at least half-time to be eligible

PA State Grant Program:Page 16; PA Student Guide40State Work-Study - job related to major

Educational Assistance Grant (EAP) National Guard

Chafee Education and Training Grant administered by the Department of Public Welfare

Blind or Deaf Beneficiary Grant

Postsecondary Educational Gratuity Program (PEGP)

Partnerships for Access to Higher Education (PATH)

Pennsylvania Targeted Industry Program (PA TIP)

For details visit www.pheaa.org or refer to the PA Student Guide

Other State ProgramsPage 20; PA Student GuideAlways consider federal loans first. They have the best interest rates and repayment provisions.

Borrow in the following order:Perkins Loan (5% fixed) studentStafford Loan (max of 6.8% fixed) studentPLUS Loan (7.9% fixed) parent and graduate studentAlternative Loan (variable rates) last resortBorrowing for Higher Education42Federal Student Loans On March 30, 2010, President Obama signed the Health Care and Education Reconciliation Act of 2010, which mandates all schools process loans through the Federal Direct Loan Program (FDLP).

Effective July 1, 2010, all federal student loans are funded directly through the U.S. Department of Education.

Students and parents may apply for Direct Stafford and Direct PLUS loans through their post-secondary schools website or at www.studentloans.gov

ALL students are eligible for Federal Student LoansMust sign the Master Promisory Note; Entrance Counseling

Page 25 PA Student Aid GuideChanged from when you went to school or previous children went to school you had to go to a bank or choose a bank for your FEDERAL loans. Now private lending has been taken out of the Federal Loan programs and all monies come from the government.

* - unless you have met your aggregate limit or defaulted on a previous student loan43Federal Direct Loan Program available to ALL students REGARDLESS OF NEEDStafford student loan: (students name)Subsidized = no interest in school status; accrues in grace3.4% fixed rate beginning 7/1/13, 1% feesone more year ..

Unsubsidized = interest accrues in school and grace6.8% fixed interest rate, 1% fees

Parent PLUS loan (parents name)Principal payment may be deferred while student attends7.9% fixed interest rate; 4% fees

Graduate PLUS loan (grad students name)Interest rate = 7.9%; 4% fees

Page 28 PA Student Aid GuideThere are four loan programs available through the Federal Direct Loan Program.

In the case of Direct Stafford subsidized loans and unsubsidized loans, the loans are made only in the name of the student. There is no credit check no cosigner requirements. Students make no principal payments while in school. In general, Repayment begins six months after the student leaves school. The interest rate is fixed on these loans.

Subsidized means that the borrower has demonstrated financial need and that the federal government will not charge the student interest on the loan while they are in school.

Unsubsidized means that the borrower is responsible for the interest at all times. It can be paid quarterly or capitalized and added to the total loan amount.

Direct PLUS is a loan that parents borrow on behalf of the student. A credit check is required. This is a fixed rate loan. Graduate PLUS loan is a loan for students enrolled in graduate school.

Student loan interest rates will rise to 6.8% in 2012 if the current rate provision expires.

There is also origination fees association with these loans - Those fees will be deducted from the loan disbursements, but you are responsible for the entire loan balance. So, when figuring out your bill you will be responsible for the balance caused by the fee deductions.44Federal Direct Stafford Loan Program Borrowing LimitsDependent Students(excluding students whoseparents cannot borrow PLUS)Base StaffordLoan Amount Subsidized/UnsubsidizedAdditional Unsubsidized Stafford Loan Amount Freshmen ttl: $5,500$3,500 $2,000 Sophomores ttl: $6,500$4,500 $2,000 Juniors, Seniors ttl: $7,500$5,500 $2,000 Graduate /Professional ttl: $20,500$8,500 $12,000 Page 27 PA Student Aid GuideThis table illustrates the maximum amounts that a dependent student could borrow through the subsidized and unsubsidized direct loan program based on if they are a freshman, sophomore, junior or senior. You will note that they can borrow the least amount of money in their freshman year.

Subsidized and Unsubsidized can be mixed but only up to 3500 in SUBSIDIZED

45Additional Unsubsidized OptionIndependent StudentsAND students whoseparents cannot borrow PLUS.Base Stafford Loan Amount Subsidized/UnsubsidizedAdditional Unsubsidized Stafford Loan Amount$4,000 Freshmen ttl: $9,500$3,500 $6,000 Sophomores ttl: $10,500$4,500 $6,000 Juniors, Seniors ttl: $12,500$5,500 $7000 Graduate /Professional ttl: $20,500$8,500 $12,000 Independent students are eligible to borrow more money. As are dependent students whose parent has been denied a PLUS loan due to the credit check process.

Grad/Professionals youre already independent and no PLUS available, amounts stay the same

46Federal Direct PLUS Loan For Parents or Graduate level students

Can borrow up to the Cost of AttendanceIn the Parents name; for the Students costs Education Cost minus Financial Aid equals the amount of which you can borrowNo Debt-to-Income test, Only lenient Credit Check Fees will be deducted from disbursementsPrincipal payment can be deferred while student is in school (interest will continue to accrue).10 year repayment term or optional repayment programs

Page 29 PA Student Aid GuideIN PARENTS NAME FOR THE STUDENTThe overall dollar amount that can be borrowed from a PLUS loan is based simply on the cost of education as determined by the financial aid office. Thus, if your school determines that your cost of education is $23,000 and you have $10,000 in financial aid in the form of grants, scholarships and loans, then the school will indicate that the maximum amount of PLUS you can apply for is the remaining $13,000. You can borrow less than the maximum. Applicants must apply for a new loan each year.

These loans are available to the biological or adoptive parents of dependent students. In some cases, a stepparent may be eligible to borrow. Either parent (or both parents) may borrow on behalf of the student. There is no provision for any other person, such as a relative, to receive a PLUS loan.

Credit check & endorser alternativeTo be eligible for a PLUS Loan, you must not have an adverse credit history, which the Department will check for when you apply for the loan. If you are found to have an adverse credit history, you may still borrow a PLUS Loan if you get an endorser who does not have such a history. An endorser is someone who agrees to repay the loan if you do not. The endorser may not be the student on whose behalf a parent obtains a PLUS Loan.

Fees - In addition to interest, you pay a loan origination fee (4%) that is a percentage of the principal amount of each Direct PLUS Loan that you receive. This fee helps reduce the cost of making these low-interest loans. The fee of 4% is assessed and will be deducted from each disbursement, so the loan amount you actually receive will be less than the amount you have to repay.

Repayment begins once the loan is fully disbursed. However, the parent borrower may request forbearance and make payments on the interest only during the time the student is enrolled.

Beginning in 2011-2012, parents will be required to file the FAFSA in order to borrow through the PLUS Loan program.47Repayment begins immediately, but can defer repayment until 6 months after student graduates or drops below half-time enrollment. If defer payment encouraged to make interest paymentsAll loans must be repaid within 10 yearsPLUS loanInterest rate = 7.9%$10,000 = $125/mo; $40,000 = 500/mo; 2 or 3 kids???

Federal Direct PLUS LoanAlternative/Private Education Loans From private lenders or financial institutions

Student borrows in his or her own nameCo-signers usually required. Some loan products have a co-signer release optionCan borrow up to the Cost of AttendanceBased on credit scores and debt-to-income ratioRepayment may be deferred until education completedFees, interest rates, loan amounts, and repayment requirements and options vary by lenderCompare loans before making choices to see whats right for you READ THE FINE PRINTIN STUDENTS NAME, PARENT OR SOMEONE AS THE COSIGNERIn some cases, a student and their family may find that they want to pursue additional loan assistance through other sources. Please keep in mind that the terms of the subsidized and unsubsidized Direct Loans will usually always be better than a private education loan. Carefully consider the amount of loan debt that the student is taking out and explore all financing options prior to borrowing through a private loan.

49Savings Family 529 Plans FamilyScholarships Various SourcesGrants Federal and StateTuition Payment Plans SchoolFederal Student Loans Department of EducationInstitutional Loans SchoolPrivate Education Loans BankHome Equity Loans BankHow to Cover the Actual Family Contribution51Estimate your full cost of schoolBorrow only what you needResearch your earning potentialThink long termKeep a healthy mindset about debt

How much should I borrow?Student loans are a popular way for students to cover some of the costs of college. Taking out a loan to pay for your education is an investment in yourself and your future. Like any debt, you do want to make sure you are not taking out an excessive amount, and that you will have the ability to repay the loans.

Estimate your full cost of school - Figuring out what college will cost is not often a quick calculationbut it's a crucial step toward borrowing the correct amount of loan debt for you. Cost is just not tuition.. make sure you're factoring in costs including room, board, school materials, and transportationBorrow only what you need: Student loans aren't free money. You'll pay back what you take and then some, after interest is accrued.Research your earning potential for student loan debt to be manageable, the total amount you owe should be less than your starting salary after graduation. If your total student loan debt is less than your annual income, you'll be able to repay that debt in about 10 years. Begin to research average starting salaries by major and college.Think long term: It can be challenging to think about bills that won't come for years, but it's critical to consider the month-to-month implications of what you borrow. You can find loan repayment calculators online, at youcandealwithit.com that can help estimate monthly student loan payments. Ultimately, your monthly payments may be affected by the type of loan you take. Student loans fall into two main categories: federal and private. Federal loans, which are offered through the government, come with fixed rates and borrower protections, including the ability to lower or postpone payments if you experience financial hardship. Private loans may have fixed or variable rates and don't typically offer flexible student loan repayment options. Keep a healthy mindset about debt: The horror stories of students drowning in hundreds of thousands of dollars of debt are, in reality, quite rare. Financial aid expert Kantrowitz wrote in a recent paper, "Who Graduates College with Six-Figure Student Loan Debt?" Students who borrow from private loan programs are more likely to graduate with six-figure student loan debt. 52Financial 101Tips and StrategiesGraduate on Time4 year for Bachelors Degree / 2 year Associates DegreeResearch and find the right school and majorMinimize transfer and change of majorEarn college credits while in high school through AP courses, Vo-Tech, and dual enrollmentConsider options for cutting costs (commute, take summer classes, buy used books, make smart meal plan choices2 + 2 Strategy (2 years at a Community College then transfer credits to a 4 year school)3 + 2 (Masters Degree)

Reduce the Need for Financial AidThings like double majors, study abroad, internships, and athletics can enhance the educational experience and improve marketability. But it comes at a price:

Total cost just increased by 25%.The fifth year likely costs 20% more than the 1st year did.Loss of institutional funds if they only allow for four years.Loss of PA State Grant if all four years have been received.Reduction in student borrowing capacity if maximum loans received in the first four years (only $4,000 left).Talk it over and plan ahead!Beware of the 5 Year Plan!For the first time, the total outstanding student loan debt in the United States now stands above $1 trillion dollars. In 2000, that number was around $200 billion.

For the first time, student loan debt outpaced credit card debt.

In the 1990s, less than half of those graduating with a bachelor's degree did so with debt. Now it's two-thirds.

The average 2011 graduate entered the job market carrying around $27,200 of debt, according to Mark Kantrowitz of the financial aid websites Fastweb.com and Finaid.org.Did you know?Stafford borrowing (estimate based on 10 year repayment) $25,000 @ 3.4.0% = $246.05 / month (sub loan)Cumulative Payments: $29,525.32Total Interest Paid: $4,525.32

$25,000 @ 6.8% = $287.70 / mo (unsub loan assuming no cap.interest)Cumulative Payments: $34,524.14Total Interest Paid: $9,524.14

Parent PLUS (assuming no cap. Int., 10 year repay)$20,000 @ 7.9% = $302 monthCumulative Payments: $36,239.95Total Interest Paid: $11,239.95

$50,000 @ 7.9% = $604 monthCumulative Payments: $724,49.90Total Interest Paid: $22,479.90

Loan Repayment57You have a choice of several repayment plans that are designed to meet your needs. The amount you pay and the length of time to repay your loans will vary depending on the repayment plan you choose.

Standard PaymentExtended Fixed RepaymentGraduated RepaymentExtended Graduated RepaymentIncome Based Repayment (IBR)Income Contingent RepaymentIncome Sensitive Repayment

Visit www.studentaid.gov for more information

Choosing a Repayment Plan

Making payments on the interest that accrues on your loan can minimize the amount that will capitalize (be added to your current principal balance) when your account enters repayment.

Interest accrues on your unsubsidized student loan:Every day, from the day the loan is disbursed until you make the last payment. Even if your loan is not in repayment.

Interest accrues on your subsidized student loan:Every day, from the day the repayment period starts until you make the last payment. During your grace period if your loan was disbursed on or after July 1, 2012 and before July 1, 2014Benefits of paying interestTo calculate your daily interest accrual, use the following formula:

Interest rate x current principal balance number of days in the year = daily interest

Example:Sara Student has a $10,000.00 current principal balance and 6% interest rate this year. Using the formula:

.06 x $10,000.00 365 = 1.6438356 (round to $1.64)

Calculating accrued interestDont borrow more than you needMaximize Federal loans vs. Private loansDont borrow more to get your degree than you plan on making the very first year after graduationUtilize institutional or private payment plans monthly payments, little or no interestReduce the Impact of BorrowingDo your ResearchWhat is the Net Price that you will pay? Use the Net Price Calculator at schools student is interested in attending to get an estimate of your net price to attend. Net Price calculator available on each schools website. What is the graduation rate?What is the average debt of graduates?What is the repayment rate and default rate of the schools borrowers?What is the employment outcome for recent graduates?

Be a Smart ConsumerIn accordance with the Higher Education Opportunity Act of 2008 (HEOA), by October 29, 2011, each postsecondary institution that participates in Title IV federal student aid programs must post a net price calculator on its website that uses institutional data to provide estimated net price information to current and prospective students and their families based on a students individual circumstances. This calculator should allow students to calculate an estimated net price of attendance at an institution (defined as cost (price) of attendance minus grant and scholarship aid) based on what similar students paid in a previous year. The net price calculator is required for all Title IV institutions that enroll full-time, first-time degree- or certificate-seeking undergraduate students.Institutions may meet this requirement by using the U.S. Department of Educations Net Price Calculator template or by developing their own customized calculator that includes, at a minimum, the same elements as the Departments template.

Shopping Sheet: The Department of Education partnered with the Consumer Financial Protection Bureau to develop the Financial Aid Shopping Sheet to promote transparency in student financial disclosures. The Shopping Sheet is designed to help students better understand the amount of grants and scholarships they would receive from a given institution, and the amount of loans an institution recommends a student take out to cover out-of-pocket costs. While the Shopping Sheet isnt mandatory, the Department of Education requests that schools adopt this format to deliver financial aid offer information to students beginning with the 2013-14 year.62Financial Aid 101Final ThoughtsStudent and parent apply for a PIN at www.pin.ed.gov

Visit websites with free information about college, financial aid and careers

Explore scholarship opportunities locally, regionally and nationally

Use Net Price Calculator at schools interested in attending to get an estimate of your net price to attend. Net Price calculator available on each schools website.

Use the FAFSA4caster to estimate EFC and eligibility for federal financial aidFree online tool, available at www.fafsa4caster.ed.gov What you can be doing nowprior to completing the FAFSAThe Net Price Calculator is a tool that you can use to estimate your net price to attend a particular college or university. Net price is the difference between the sticker price (full cost) to attend a specific college, minus any grants and scholarships for which you may be eligible. Sticker price includes direct charges (tuition and fees, room and board) and indirect costs (books and supplies, transportation and personal expenses).

64Scholarships are a form of student financial aid that does not need to be repaid. Scholarships are FREE MONEY! Scholarships are awarded by foundations, philanthropists, non-profit organizations, businesses and colleges to help students pay for college.

There are several free scholarship databases available online. With more than 1.5 million scholarships worth more than $3.4 billion.

The month of November is National Scholarship Month and is devoted to raising awareness of the need for scholarship support for postsecondary education.

ScholarshipsDon't waste your money on fee-based scholarship matching services. You won't get any better information than you can get from the free services available on the Web65Start Searching EarlyUse FREE Scholarship Search sitesDont ignore scholarships with smaller award amountsDont miss deadlinesSearch for Scholarships every yearCheck corporate websites such as Target, Walmart, Kentucky Fried Chicken as they all have scholarship programs and you don't have to work there to get them

Scholarship Search Tips!Scholarships for Average StudentsVariety of less competitive scholarshipsCommunity Service ScholarshipsVideo contestsCreativityEthnicityUnusual scholarshipsBased on Last Name Seussvile: Oh, The Places You'll Go! College ScholarshipPatrick Kerr Skateboard ScholarshipTupperware Home Parties Scholarship

For more visit: http://www.finaid.org/scholarships/

Scholarship Opportunities for EveryoneAverage students often ask whether there are any scholarships available to students who don't have a 4.0 GPA. There are many scholarships for average students that focus on qualities besides academic merit, as well as a variety of less competitive scholarships. There are also many community service scholarships and scholarships for hispanic and latino students. 67Fastweb.com is an excellent site to use for searching as it is a database that pulls specific scholarships for students based on their input. It also sends email alerts when a scholarship matches the student.

Fastweb.com is the largest, most accurate and most frequently updated scholarship database.

www.fastweb.com

Fastweb.comProvides information on other free scholarship search sites

Information on Scholarship Scams

Suggestions on how to maximize your chances of winning a scholarship

For more information visit: http://www.finaid.org/scholarships/

www.finaid.org75 % of todays jobs require education beyond high school

According to US Census Bureau Data, the average college graduate from a 4-year degree program earns almost $1,000,000 more over a lifetime than a high school graduate.

A Postsecondary Education is Worth it!!!!!Average loan payments for higher education: $313/mo for 10 years

Average additional earnings with higher education: $2,100/mo for 40 yearsWhat a Deal.Education pays in Higher Earnings and Lower Unemployment

Source: Bureau of Labor Statistics 2011Career & College Planning

pheaa.orgEducationPlanner.orgYoucandealwithit.comMyfedloan.orgPHEAA toll free: 1-800-692-7392Federal Student Aid Info Center 1-800-433-3243www.fafsa.govwww.studentaid.gov general financial aid infowww.studentloans.gov information on federal loansResources75Presenter Contact InformationFran C. McKeownHigher Education Access Partner Southeast Region of PAfmckeown@pheaa.org

Questions?Questions Miscellaneous slides- Extra SlidesIf you live like a doctor when youre a student, you will probably have to live like a student when you are a doctor.

Think about the futureThe average student does not finish on time (transfers, change of major, etc.)Every extra semester can significantly add to borrowing totals

Did you know????According to Forbes Magazine, the average starting salaries for 2010 college graduates are: Liberal arts: $32,000 $36,000 (approx. $2,125/mo net) Teachers: $29,000 $33,000 (approx. $1,950/mo net) Engineers: $60,000 - $75,000 (approx. $4,200/mo net) Avg. all grads: $45,000 - $48,000 (approx. $2,900/mo net)

Starting SalariesNumber of Recipients of Federal Aid by Program (with Average Aid Received), 2010-11

SOURCE: The College Board, Trends in Student Aid 2011, Figure 5.College Expenses

Average stated tuition and fees have roughly tripled since 1980-81, even after accounting for inflation.

In 2010-11, the typical in-state full-time undergraduate was charged $7,605 in tuition and fees at public four-year colleges and universities (before grant aid), an increase from $2,119 in 1980-81 (all figures adjusted to 2010 dollars). Other colleges and universities have increased tuition and fees by similar orders of magnitude.

Average tuition and fees at private colleges and universities increased from $9,535 in 1980-81 to $27,293 in 2010-11. 84SOURCE: The College Board, Trends in Student Aid 2011, Figure 5Number of Recipients of Federal Aid by Program (with Average Aid Received), 2010-11

Published college tuition and fees increased 439 percent from 1982 to 2007, while median family income rose 147 percent.

*** The National Center for Public Policy and Higher Education

Need for Financial Assistance86Public 4-Yr Institution*Private 4-Yr Institution*

1980-81$ 6,424$14,0901990-91$ 8,542$21,5682000-01$10,784$27,2372009-10$15,014$32,790

*For the academic year, estimated undergraduate prices for tuition, room and board(Source: National Center for Education Statistics)

College Costs

Determining Financial Need for Subsidized Student Loans

Calculators and Resources

Figuring outwhat works best

Enter the Numbers

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