How to Pay for College Arizona Commission for Postsecondary - PowerPoint PPT Presentation

How to Pay for College Arizona Commission for Postsecondary Education Deena Lager, Director Arizona Student Financial Aid Programs and Arizona Family College Savings (529) Program www.az529.gov

How to Pay for College AGENDA: Three Common Resources  Federal Student Aid  Types of Federal Aid  When and How to Apply  Scholarships  When and Where to Apply  Savings  AZ 529 Plan  Tax Benefits  Questions

Resource #1: Federal Student Aid The federal government offers a number of financial aid programs. $150 billion each year in:  Grants  Work-study funds  Low-interest loans Federal student aid helps pay for educational expenses:  Tuition and fees  Room and board  Books and supplies, a computer  Transportation

Types of Federal Student Aid Grants Money that does not have to be repaid Work-study funds A work program through which students can earn money to help pay for school Low-interest loans Borrowed money for college or career school; loans must be repaid, with interest

Federal Student Aid Info Best resource for Federal Student Aid https://studentaid.ed.gov/ Visit website regularly to see what questions are trending and learn about any new changes for the upcoming year. Never pay to complete a Federal Aid application!! It’s a FREE application.

Applying for Federal Student Aid  When? High School Senior Year (anytime after October 1 st ) Apply by November 15 th to meet most priority deadlines  How? Parents and students complete the F ree A pplication for F ederal S tudent A id ( FAFSA ) Go to StudentAid.Ed.Gov Takes about 25 minutes to complete

Resource #2: Scholarships Free money that does not have to be repaid. Can come from:  State government  A college, university or vocational school  Private or non-profit organizations  Research scholarship requirements early (grades 8-11)  Take time preparing (grades 10-11)  Pay attention to application deadlines! (grade 12)  There are also scholarships you can apply for before senior year

Scholarship Resources Arizona Community Foundation www.azfoundation.org College Depot www.phoenixpubliclibrary.org/collegedepot/Pages/Scholarships.aspx Going Merry https://www.goingmerry.com/ Scholarship America www.scholarshipamerica.org Never pay to apply. Avoid scholarship scams!!

Resource #3: Savings Children with any college savings are six times more likely to attend a four-year college than children with no dedicated college savings account. Source: Washington University in St. Louis, July 2012

College costs continue to rise National Average College Attendance Costs 2018 – 2019* Annual Basic Tuition & Fees Room & Board Books & Supplies Expenses Private College or $35,830 $12,680 $1,240 $49,750 University Public University $10,230 $11,140 $1,240 $22,610 (In-State) Community College $3,660 8,660 $1,440 $13,760 (In-State) *Source: College Board

How to Set a College Savings Goal  Identify estimated costs • What kind of program or school is your child interested in? • Will they live on campus or at home?  Identify your timeline • How long do you have to save?  Establish a clearly defined goal • Income percentage/fixed dollar amount? • One-Third Rule  Assess your current budget • Do you have discretionary income? • Can you re-prioritize or find more money?  Research additional funding options • Federal and State aid • Private and Institutional Scholarships

Save Early, Save Often $140,000 Monthly $120,000 $138,612 Investment at a 6% $100,000 Annual Return $80,000 $87,246 $300 $60,000 $100 $46,204 $49,164 $40,000 $50 $29,082 $20,000 $20,931 $16,388 $23,102 $14,541 $6,977 $8,194 $3,489 $0 0 5 Years 10 Years 15 Years 20 Years

Better to Save and Borrow Less Need: $35,000 for College $45,000.00 $40,000.00 Solution: $35,000.00 Save or Borrow? $30,000.00 $25,000.00 Borrow $20,000.00 $15,000.00 Save $10,000.00 $5,000.00 $0.00 Pay $375.24/mo for Save $200/mo for 10 Years @ 5% 11 Years @ 5%

Arizona 529 Plan The State of Arizona offers one of the most diversified 529 plans in the country. Arizona’s 529 Savings Plan benefits include:  Contributions and earnings grow free from federal and Arizona State income taxes when used to pay qualified higher education expenses.  Tax deductions for Arizona taxpayers contributing to a 529 plan of up to $4,000 for married tax filers and $2,000 for single filers.  College savings offered through three financial institutions that include choices of mutual fund options, age-based portfolios, and FDIC insured CD’s and high -yield savings accounts.

Arizona 529 Plan Additional benefits:  Assets are not considered when determining Arizona financial aid awards.  Savings can be used at all U.S. Department of Education accredited universities, colleges, private colleges, and vocational schools in the U.S., as well as eligible foreign institutions.  Allows for anyone to make contributions (grandparents, family members, friends).  Ability to begin saving with as little as $15 a month.  Ability to change account beneficiaries within same family.

Member of the Family *Source: Savingforcollege.com

One Great Plan, Three Great Choices The Arizona 529 College Savings Plan offers a wide variety of choices through three highly regarded financial institutions. College Savings Bank, a Division of NexBank SSB, provides fixed rate CDs and a high- yield savings account. Each account holder’s principal is insured by the FDIC. www.collegesavings.com/arizona • 1.800.888.2723 Fidelity Investments offers both actively managed and index portfolios. Within those portfolio categories you can choose from age-based allocation, static allocation and/or individual portfolios. www.fidelity.com/arizona • 1.800.544.1262 Ivy InvestEd 529 Plan offers choices of investment products including age- based, static, and individual fund portfolios through financial advisors across the country. www.ivyinvestments.com • 1.800.777.6472

Questions

19 Thank you for attending! Arizona Family College Savings (529) Program Deena Lager Email: dlager@azhighered.gov Website: www.az529.gov Facebook: AZCollegeSavings