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    Financing Your Students Education08 Financing Your Students Education08 Presentation Transcript

    • Financing Your Student’s Education Carolyn E. Karno Manager, Early Awareness and College Planning
      • Early Awareness and College Planning Department
        • Free Services
          • College Planning Services
          • Financial Aid Assistance
          • Assistance with Aid Applications
          • One-on-One Advising
          • Workshops and Professional Development Programs
          • 1-866-752-6443
        • How much will it Cost?
        • What is Financial Aid?
        • Types of Financial Aid
        • The Financial Aid Formula
        • The Application
        • Financial Aid Packaging
        • Advice From Experts
      AGENDA
        • Tuition and fees in Connecticut range from $2,800 to more than $36,000
          • Add $9,000 - $12,000 for room and board
          • Add approximately $1,000 for books
          • Don’t forget personal expenses
      College Costs
    • Types of Financial Aid 40% $97.1 Billion in Aid to Undergraduates in 2006-07 21% 13% 8% 7% 5% 5% Does not include private/state education loans estimated at $19 Billion – about 29% of loans taken out by undergraduates Source: The College Board, Trends in Student Aid 2007
        • Grants - Based on financial need
          • Federal
            • Pell Grant – maximum $4,310
              • Will increase to $4,800 in 2008
            • Academic Competitiveness/SMART
            • Supplemental Education Opportunity
          • State
            • CT Aid for Public Schools
            • CT Independent College State Grant
          • Institutional
      Gift Aid
        • Scholarships
          • Often referred to as merit aid
          • Based on talent or special ability
            • Academics
            • Athletics
            • Visual and Performing Arts
            • Leadership
            • Community Service
      Gift Aid
      • State Capitol Scholarship
        • Students must have either a score of at least 1800 on the SAT or be in the top 20% of their class
      • Institutional Scholarships
        • Some colleges provide merit based aid
      • Local and Community Scholarships
        • Check with the guidance office, chamber of commerce, civic organizations, churches, union
      Finding Scholarships
        • Beware of companies that promise to save you thousands of dollars in tuition by assisting with you your financial forms
        • Beware of companies that ask you for money up front to “hold” a scholarship
      • Don’t Get Scammed!
        • Federal Work-Study
          • Must complete the Free Application for Federal Student Aid (FAFSA) to be eligible
        • Institutional Work-Study
      Earn While You Learn
        • A FAFSA must be completed in order to receive a Stafford loan
        • Available directly through the federal government or through a lender
        • Depending on the amount of financial need, loans will either be:
          • Subsidized
            • Government pays the interest
          • Unsubsidized
            • Student is responsible for the interest
      Stafford Student Loans
      • Stafford Loans – Fixed rate of 6.8%
      Six month grace period and possible loan cancellation provisions As of July 2008, the rate will go down to 6.0% for subsidized loans $5,000 $5,500 Senior $5,000 $5,500 Junior $4,000 $4,500 Sophomore $4,000 $3,500 Freshman Additional Unsubsidized Base Limits
        • Maximum loan is $4,000 per year for undergraduates
        • Loan is provided through the school
        • Fixed interest rate of 5%
        • 9 month grace period
        • Possible cancellation provisions
      Perkin’s Loan
      • Parent loan for dependent undergraduate students
      • Also can be used by graduate students
      • Fixed Rate Loan
        • 8.5% under FFELP
        • 7.9% under Federal Direct Loan Program
      • 10-year standard repayment period
      • Repayment begins 60 days after final disbursement
      PLUS Loans
        • State Loan Programs
          • CT FELP
          • Fixed Interest Rate
          • Approval based on credit worthiness of co-borrower
        • Private Education Loans
          • Usually variable rates tied to PRIME or LIBOR
        • Institutional Loans
      Other Loans
        • Federal Loans do not require a co-borrower
        • Many FFELP lenders offer borrower benefits
          • Low or zero origination fees
          • Interest rate reductions for auto-debit
          • Interest rate reductions after a number of on-time payments
        • Private Loans do not require the completion of a FAFSA
      Are All Student Loans the Same?
        • Unlocking the Mystery of Financial Aid
      How Much Aid Will My Student Receive?
        • To the extent they are able parents have the primary responsibility to pay for their child’s education
        • Students also have the responsibility to contribute
        • A family’s estimated ability to pay must be evaluated in an equitable and consistent manner, recognizing that special circumstances may affect a family’s ability to pay
      Principles of Need Analysis
      • Federal Methodology
        • Income
        • Assets
        • Family Protection Allowances based on:
          • Family size
          • Number in college
          • State of residence
          • Age of older parent
          • Pension and home value is excluded
      • Institutional Methodology
        • May also consider:
          • Home value
          • Value of pension
          • Medical expenses
          • Private school tuition
          • Non-custodial parent information
      Expected Family Contribution
    • Determining Financial Need
        • Free Application for Federal Student Aid
        • CSS/PROFILE
        • Other Institutional Forms
      Forms
        • www.fafsa.ed.gov
        • Used to calculated student’s EFC
        • Used to determine eligibility for federal and some state aid
        • Can not be completed until January 1, 2008
        • Must be submitted annually
        • Can be submitted electronically or by paper
      The FAFSA
        • Quickest processing time
        • Self-edits
        • FAFSA worksheet
        • Save and return
        • Electronic confirmation and follow-up
      FAFSA On The Web
        • Go to www.pin.ed.gov
          • Parent and student should sign up for a PIN
          • PIN will be used an your electronic signature
      Getting Started
        • 2007 tax return
        • 2007 W-2 forms or end of year pay stub
        • Most current records for investments
        • Record of untaxed income
        • Most recent bank statements
        • Social security numbers
        • Student’s driver’s license number
      Information Needed
        • Only biological or adoptive parents
        • In the case of divorce, the person who has the most physical custody of the student will complete
          • If that parent is remarried, the step parent will also complete
      Who Is Considered a Parent?
      • Section 1
        • Questions regarding student
          • age, DOB, address, license number
          • E-mail address
          • Marital status
          • Degree attainment
      Student Questions
      • Section 2
        • Dependency status
      • Section 4
        • Student Finances
      • Section 5
        • List of schools – up to 10 on the online application
      Student Questions
        • Section 3
          • Marital Status, tax information, income, DOB, SS numbers
          • Assets
            • 529 Plans are considered a parent asset
            • Coverdell is a parent asset
            • Custodial accounts are a student asset
            • List value of real estate other than primary residence
            • Value of retirement accounts are not reported
      Parent Information
      • Worksheet A
      • Earned income credit, untaxed social security, welfare benefits
      • Worksheet B
      • Amount contributed to your retirement, child support received, IRA deductions or distributions, other money received not reported elsewhere
      • Worksheet C
      • Child support paid, tax credits
      FAFSA Worksheets
        • Line by line copy of the information submitted
        • It will list a preliminary EFC
        • It will specify if student is eligible for a Pell and Academic Competitiveness Grants
        • You should review information and update as necessary
      Student Aid Report
      • CSS/PROFILE
        • Used by some independent colleges
          • More detailed information
          • Can be completed as early as October 1 st
          • Must be completed online
          • There is a charge
          • Non-custodial information may be required
      Other Forms
      • Some colleges will have a supplementary form
        • Sometimes used for “early decision” applicants
        • Often used by independent colleges that do not use the PROFILE
      Other Forms
        • Your student will receive an Award letter
          • May consist of gift aid and self-help
          • Awards may be adjusted upon verification
          • Most financial aid awards do not meet the full financial need of the student
      Your Student is Accepted to College
    • Sample Award Letter
      • School A = $15,000 School B = $33,000
      Gapping EFC $8,000 Scholarships $3,500 Loans $3,500 EFC $8,000 Scholarships $10,500 Loans $3,500 GAP $11,000
        • How does the financial aid office handle special circumstances?
        • How will private scholarships impact my aid package?
        • What are the requirements to keep my grants or scholarships?
      Questions for the Financial Aid Officer
      • Give your student an estimate of the amount you feel comfortable contributing towards his/her education
      • Speak to your child about the importance of applying to what you might consider a financially safe school
      • If your student intends to borrow, make sure he/she has a good understanding of the responsibilities
      Advice From the Experts
        • Pay expenses from current cash flow
        • Withdrawals from parent and student savings and investments
        • Use the proceeds from an inheritance or gifts from relatives
        • Withdrawals from college savings plan (529) or bonds
        • Tuition Payment Plans
        • Student and/or Parent Federal or loans
        • Alternative loans
        • Financing through a home equity loan or home refinance
        • Borrowing against a retirement account
        • Withdrawals from an IRA account
        • Maxing out credit cards
      How Do Families Pay for College?
      • Remember, College is an investment in your child’s future