Financial Aid Night presentation

1. Please silence your cell phones!
Thank you for being considerate to the people around you.

2. Paying for
Postsecondary Education

4. Distance from home
Cost
Ideal fit?
Admission
criteria
Size Geographic
setting
Atmosphere
Academics

5. How
much?

6. • Please right click and duplicate slide.
2017:
4-year Public - $20k - $30k
4-year Private - $30k – over $60k
2030:
4-year Public - $40k - $60k
4-year Private - $92k - $130k
cost projector at www.finaid.org

8. <50%
% of students who graduate within 4 years. (look at collegeresults.org).

9. 6-year
grad rates
Schools will advertise 6-year graduation rates to make them look better.
Collegeresults.org

10. 120
Number of credits usually required to complete a Bachelor’s Degree.

11. 12 x 8 =
96; this means a student is already 24 credits short (an entire year!) for their 4-year credential.

13. The number of credits a student should consider taking MINIMALLY every semester to graduate on-time.

14. Click to edit Master title style
Plan Ahead

15. AFFORDABILITY

16. ROI

18. How much will I
have to borrow for
school?
What do I want the rest of
my life to look like? What
do I want to have? How
do my decisions now
affect my vision for my
future?
Will there be jobs
available in my
chosen field?
Will I be able to
afford my
monthly loan
payments?
Does a cheaper option
make sense if my
family is struggling to
pay?

19. Resources
• EducationPlanner.org
• MySmartBorrowing.org
• CollegeResults.org
• Collegecost.ed.gov
» Net-price calculators
» College Scorecards

20. Click to edit Master title style
Scholarships

21. It’s never too early to find free
money!
• Start early and keep looking
• Check with school counselor about local
opportunities
• Google your interests
• Activities, Athletics, Family, Hobbies,
Participation, Attributes – Do your research!
• Don’t miss deadlines!

22. 0
Average number of scholarships that senior students apply for in high school.

23. Click to edit Master title style
FAFSA

24. FAFSA.gov
Apply after October 1
(of senior year in hs)
It’s the student’s
application
• Parent sections
2018-19 FAFSA will use
2016 tax information

25. STUDENT SECTION:
Dark Blue
PARENT SECTION:
Purple

26. IRS Data Retrieval Tool
•Should be available on Oct. 1
•Information will be encrypted
•Families should utilize the tool if
you’re able

27. FSAID.ed.gov
• Allows you to sign the FAFSA (as well as
loan documents)
• The student and one parent (if the student
is dependent) will need an FSA ID
Username and Password
• DO NOT lose it; DO write it down – You will
need to file a FAFSA every year you are in
postsecondary school
• Need separate email addresses for student
and parent; make sure information is
accurate (and identical to the information
you file on your FAFSA)

28. Whose information goes on
the FAFSA?
• Divorced or separated parents -
the parent that provides more
than 50% of students support
(household)
• Stepparents – yes
• Adoptive parents - yes
• Grandparents – no
• Foster parents - no
• Legal guardians - no
• Anyone else the student is living
with - no

29. Independent Students are:
• 24 or older on Jan 1st of
award year
• Veteran (includes active duty
personnel)
• Working on graduate degree
• Emancipated minor in legal
guardianship
• Orphan, in foster care, or
ward of the court at anytime
when student was age 13 or
older
• Have legal dependents other
than spouse
• Student deemed homeless
by proper authority

30. Know your deadlines!
Schools have priority filing deadlines.
ASK THEM!
State Grant deadline is:
May 1 - 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 university
August 1 - 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

31. Expected Family Contribution
(EFC)

32. Expected Family Contribution (EFC)• Student and Parent Contribution
• Bulk of EFC comes from income
• Assets exclude: value of home you
live in, personal property,
retirement, and life insurance.
• Assets include (but not limited to):
value of cash, savings, and
checking, investment accounts, 529
plans, rental property, etc.
• Parent asset contribution = roughly
6%
• Student income contribution = 50%
of amount over $6,570; assets at
20%.
• Parent contribution divided by
number of children in college at the
same time

33. State Grant Form
First-time filers
Can also access at pheaa.org
through Account Access

34. Click to edit Master title style
Award Letters

35. Financial Need
Schools/colleges receive financial aid information and
calculate financial need.
School cost……………………. $30,000
EFC…………………………….. - $ 3,000
Financial need………………… $27,000
FAO “packages” student based on financial need and
available funding (varies from school to school).
Financial aid award letter sent to student.

36. Sorting it all out

37. How much is
gift aid? – I
don’t have to
pay it back.
How much is
self-help aid? –
I will have to
pay it back or
earn it.
What are the
total costs and
how much will I
owe the
school?

38. Where does
the money come from?

39. Gift aid (do not repay)
• Pell Grant (max $5920)
• SEOG
• TEACH Grant
• Iraq and Afghanistan
Service Grant
• Americorps
• GI Bill
For more information: studentaid.ed.gov,
pheaa.org, or gibill.va.gov
• PA State Grant (max $4318)
» (OH, DE, MA, VT, WV,
and DC)
• EAP
• Chafee Grant
• Blind or Deaf Beneficiary
Grant
• Postsecondary Educational
Gratuity Program
• PATH
• PA TIP
• RTSS

40. Self-help aid (must work to earn or repay)
• Work Study
» Say “yes” to work study question on the FAFSA
• Loans
» Federal Direct Stafford Loans
» PLUS Loans
» Private/Alternative Education Loans

42. $37,000
Average student indebtedness for graduates of the class of 2016.

43. What does a $1 million look like?

44. What does $1 Trillion look like?

45. Repayment Examples
It is estimated
that you would
need an annual
salary of $46,405
to be able to
afford this loan
payment.
Source: finaid.org

46. Repayment Examples
Source: finaid.org
It is estimated
that you would
need an annual
salary of $23,202
to be able to
afford this loan
payment.

47. Opportunity Cost

48. Opportunity Cost
Source: bankrate.com
What if the
student invested
the extra $200
per month for 10
years instead
into a Roth IRA?

49. Opportunity Cost
Source: bankrate.com
What if they
never invested
another penny
but saved it until
retirement 40
years late (age
72).

50. Studentloans.gov
Log in with your
FSA ID and
complete your
Master Promissory
Note (MPN) and
Entrance
Counseling.

51. Direct Stafford Loans
» Subsidized – no interest while in school
◦ Interest will be charged after an interest-free, 6-
month-grace period
◦ 4.45% fixed rate for loans between 7/1/17 and
6/30/18
◦ *1.066% origination fee deducted at disbursement
» Unsubsidized – interest accrues in school and grace
◦ 4.45% fixed rate for loans between 7/1/17 and
6/30/18
◦ *1.066% origination fee deducted at disbursement
» *Gross loan amount of $5500 will be $5441.37
» Interest rate adjusted annually and capped at 8.25%

52. Calculating Accrued Interest
To 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 $2,000 current principal balance and 4.45%
interest rate this year. Using the formula:
• .0445 x $2,000 ÷ 365 = $0.24 (~$21.60 quarterly interest)
What if she borrowed $10,000?
• .0445 x $10,000 ÷ 365 = $1.21 daily (~$108.90 quarterly interest)

53. Loan Servicer
myfedloan.org
navient.com
mygreatlakes.org nelnet.com

54. Stafford Loan Limits

55. Stafford Loan Limits

56. Parent Loan for Undergraduate
Students (PLUS)
• Parent borrows a loan for the student
» 7.00% interest rate for 2017-18; interest capped at
10.50%
» Up-front fee of 4.264% deducted at disbursement
» May borrow full cost of education minus any aid
» Credit Check is required
» Can defer repayment while the student is enrolled,
but as with Unsubsidized loans, the interest does
accrue. Interest payments are encouraged.
• Apply @ StudentLoans.gov

57. Private/
Alternative Loans
• Nonfederal loans, made by a
lender such as a bank or credit union.
• Student is the borrower. Co-signers usually
required. Some loans have a co-signer release.
• Based on credit scoring and debt-to-income
ratio.
• Fees, interest rates, loan amounts, and
repayment provisions vary by lender.
• Compare loans before choosing and read the
fine print.
• Loan of Last Resort.

58. Click to edit Master title style
Decide

59. Deciding

61. Review and consider all of your
options. Sometimes the best fit
is not your first choice.

62. Determining Affordability
• Approach this process as you are buying an
EDUCATION.
• Apply everywhere you want, but be open
minded and give yourself options.
• Think in terms of yesterday’s money, today’s
money, and tomorrow’s money.
• Have discussions as a family.

63. • Out-of-pocket?
• Expendable
income/sign up for a
payment plan?
• Scholarships?
• Parent loans? (*home-
equity line of credit)
• Double check with the
school (additional
institutional money,
scholarship opportunities,
institutional loans).
Ways to Pay

64. Ways to Save

65. Beware of the 5 or 6 year plan!
• 5th year will cost 20-25% more than your first
year.
• Loss of institutional funds after 4 years.
• Loss of State Grant eligibility after 4 years.
• You will run out of federal loan eligibility (capped
at $31,000 for undergraduate students).

66. What should you do now?

67. Timeline
• Apply for admission starting in
September of senior year in hs
• Apply for financial aid starting October 1
of senior year in hs
• Decide by May 1 of senior year in hs
• Pay deposit
• Billing in July for fall; Payment usually due in August
How are you going to pay the balance?
Payment plans; PLUS or alternative loans; 529 Plan or
other savings?
• Has anything changed since you filed the FAFSA? (divorce, job
loss, death of parent)

68. Resources
• FAFSA.gov
» Questions about FAFSA or FSA ID
◦ 800.433.3243
• PHEAA.org
» Questions about the State Grant Form
◦ 800.692.7392
• Educationplanner.org
• Mysmartborrowing.org
• Studentloans.gov – information on federal
loans
• Nslds.ed.gov – information on your
specific federal loans

70. Presenter Information
Kim McCurdy
Higher Education Access Partner
PHEAA
kmccurdy@pheaa.org