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Trends in F A for Counselors
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Trends in F A for Counselors

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    Trends in F A for Counselors Trends in F A for Counselors Presentation Transcript

    • Trends in Financial Aid How to Help Families Prepare Carolyn E. Karno Manager, Early Awareness and College Planning
    • Basic Premise
      • A college education can be assessable and affordable for the vast majority of students who complete a college preparatory program in high school.
    • Access and Affordability Issues
      • College costs
      • Trends
      • Who is going to pay?
      • What amount of debt is considered reasonable?
      • How counselors can help
    • Tuition and Fees
      • Tuition and fees in Connecticut range from approximately $2,800 - $36,870
        • Community Colleges $2,828
        • Central CSC - $6,734
        • UConn - $8,852
        • Trinity - $36,870
    • Current Trends
      • 44% of students who enroll in college do not graduate after six years
      • Many students who don’t earn degrees are burdened with significant college debt
      • Half of all college freshmen are taking at least one remedial course
      Source: College Board Connection: April 2008
    • Current Trends – Public Institutions
      • Admission to four year schools has gotten more competitive
      • Graduation rates at many state institutions need improvement
      4-Years 5-Years 6-years 2005 CT Graduation Rates Source: CT. Department Of Higher Ed. As reported To IPEDS, Spring 2006 Information on entering Freshmen in 1999* 40% 31% 11% CCSU 35% 28% 10% WCSU 36% 30% 12% SCSU 43% 39% 25% ECSU 72% 69% 50% UConn
    • Current Trends at Private Schools
      • College costs continue to rise an average of 6% per year
      • Many elite private institutions are replacing loans with grants for low-moderate income families
      • Students at private colleges receive an average of $5 in institutional aid for every $1 received from the federal government*
      • Private colleges tend to have higher four, five, and six-year graduation rates
      Source: “Aid to College Students”; New York Times, 3/26/08
    • Current Trends – Merit Aid
      • High income students tend to get the bulk of merit awards
      • From 1994 to 2004
        • Students from families in the top income quartile ($111,000 or more) received three times as much merit aid as students from the lowest quartile ($38,000 or less)
      Source: The Chronicle of Higher Education, February 2, 2007, reporting on a study by Eduventures
    • Results of Trends
      • Students are taking longer to graduate
      • Student borrowing is increasing
        • Average debt for public college graduate is approximately $17,000
        • Average debt for private college graduate is $28,000
      • Non-federal loans played the biggest role for students enrolled in private colleges with approximately one third of their loans coming from the private sector.*
        • This did not include parent borrowing
      Source: Trends in Student Aid 2007: The College Board
    • Who is Going to Pay?
      • Sole responsibility of the parent
      • Sole responsibility of the student
      • Shared responsibility of the parents and student
    • How Much Will You Pay Toward Your Kids’ College?
      • ABC World News Poll February 2007
        • Nine in 10 parents say it is likely that their children will go to a 4-year college
        • 48% noted that they are behind in saving for it
        • Only two in 10 plan to pay for the entire cost
        • More than four in 10 are counting on scholarships and grants
      ALL MOST SOME LITTLE/ NONE
    • Who is most likely to get gift aid?
      • Most federal need-based aid goes to students in the lowest income quadrille
        • The amount received can be greatly increased if the student qualifies for the Academic Competitiveness or SMART grants
      • Merit aid tends to go to students who are the most academically/athletically, artistically competitive regardless of financial need
      Source: U.S. News and World Report, Paying for College Sept. 10, 2007
    • Before the College Search Begins
      • Students should have an idea of the amount their parents are willing to contribute
        • Will impact the list of potential schools
      • For those students who plan to borrow, they should begin examining potential careers
        • Can impact the amount of debt a student should have
    • Are Students Concerned About Debt?
      • According to a recent survey by Key Bank, students ranked “curriculum” as the most important factor when choosing a college.
      • Only 12% selected a school based on affordability
      51% 18%
    • Should Students Be Concerned?
      • Although college graduates tend to earn more than high school graduates, almost 1 in 3 Americans in his/her twenties is a college drop out.
        • What happens to them?
          • Young adults 18-24 are most likely to hold minimum-wage jobs
      Source: Generation Debt: Why Now is a Terrible Time to be Young; Anya Kamenetz
    • The Impact of Changing Demographics
      • In the 1970’s the nation’s largest private employer was General Motors
        • Paid an average of $17.50 per hour in today’s dollars
      • Today, the largest employer is Walmart
        • Average pay is $8.00 per hour
        • Many of these young adults are part of the working poor
      Source: Generation Debt: Why Now is a Terrible Time to be Young; Anya Kamenetz
    • What Students Should Know About Debt
      • Students should know how to estimate how much debt is reasonable
        • Most lenders advise students not to exceed 15% of their anticipated income
        • A good rule of thumb is that the manageable debt load for a student is about the same as a student’s anticipated starting salary
    • Student Borrowing
      • Students should borrow from the federal student loan program before looking at any alternative loans
      • Students should borrow as little as possible during their first two years
        • Students who make it through the first two years are more apt to graduate and should be able to handle increased debt
    • Student Loan Advisor
      • Student Loan Advisor at www.finaid.org
        • Field of Study/Career: If you've selected Other , what is the current starting salary for your field?
        • Expected Graduation Year:
        • Educational Debt-to-Income Ratio: Can choose 10 to 15%
        • Loan Interest Rate:
        • Loan Term (Years):  
        • Calculate
    • What Can Families Afford to Pay?
      • One third rule
        • Families should have saved at least one third of the anticipated cost of a child’s education
        • One third will come from current cash flow
        • One third will come from parent and student borrowing
      Loans
    • Ways Families Pay for College
      • Current cash flow
        • Tuition payment plan
      • Parent and student savings and investments
      • Inheritance or gifts
      • College savings plans (529) or ESA
      • Federal student and/or parent loans
      • Private education loans
      • Home Equity loans
      • Borrowing against a retirement account
      • Withdrawals from an IRA account
      • Credit cards
      • Second job
      • Postponing Retirement
    • How Counselors Can Help
      • Integrate financial literacy into your program
    • How Counselors Can Help
      • Make sure your students know the answers to the following questions:
        • Did you complete the FAFSA?
        • What is your Family’s Expected Family Contribution?
        • Are you eligible for a Pell grant?
        • Are there any other financial aid forms required at the schools on your list? - DEADLINES
        • Are you eligible for an ACG?
        • Do you know what your parent(s) can contribute towards your education?
    • Financing Questions
      • What is the cost of attendance of the colleges on your list?
      • What percentage of need does each school meet?
      • Do you have a list of grants and scholarships that you will pursue?
    • Financing Questions
      • Do you know how long it will take to pursue a degree?
      • Do you have any back-up schools on your list – schools you can afford with limited financial aid ?
    • Financing Check List
      • Comparison of award letters
        • Use College Cost Comparison Worksheet at www.cslf.com
    • CSLF Bottom Line Work Sheet
      • Bottom Line: Students need to know if borrowing is a wise investment for their future?
    • ? Questions