LPL Financial SmartCollegeFunding.com LPL Financial Member - PowerPoint PPT Presentation

By: Scott Kessler LPL Financial SmartCollegeFunding.com LPL Financial Member FINRA/SIPC

Financial Aid Basics - HOPE  3.0 high school HOPE GPA across core academic subjects (evaluated by GSFC)  3.0 across ALL college courses attempted  Evaluated at the end of every Spring semester AND at 30, 60, and 90 attempted hours  Can LOSE HOPE at any of these checkpoints  Can only GAIN HOPE at 30, 60 and 90 attempted hours LPL Financial Member FINRA/SIPC

Financial Aid Basics – Zell Miller  ZELL MILLER SCHOLARSHIP ELIGIBILTY  Graduate as the valedictorian or salutatorian; OR  Graduate with a 3.7 GPA (as calculated by GSFC); AND 1200 on the math and reading portions of the SAT or 26 on the ACT – One test administration, not highest combined score  Must maintain 3.3 GPA across ALL college courses attempted  Evaluated at the end of Spring term AND at 30, 60, and 90 attempted hours LPL Financial Member FINRA/SIPC

Financial Aid Basics  Common Requirements between HOPE and Zell Miller Scholarship  GA resident at high school graduation – must be GA resident for 12 months prior to receiving HOPE/ZMS in college  Not a GA resident at high school graduation – must be GA resident for 24 months prior to receiving HOPE/ZMS in college  Lose and Regain only ONE time  Can lose ZMS and maintain HOPE eligibility if above 3.0 college GPA LPL Financial Member FINRA/SIPC

Financial Aid Basics  Common Requirements between HOPE and Zell Miller Scholarship  127 Attempted Hour Limit  ATTEMPTED HOURS  Hours of record after drop/add – “If it appears on the transcript”  Includes F grades and withdrawals Seven Year Limit following high school graduation LPL Financial Member FINRA/SIPC

We know why college matters  According to Pew Research Center – on average college grads earn $17,500 more per year than high school grads  By 2020, 65% of all U.S. jobs will require a degree beyond high school  Unemployment rates by educational level as of 4/2015 8.6% Less than high school diploma 5.4% High school, no college 4.7% Some college 2.7% College or greater LPL Financial Member FINRA/SIPC

Graduation Rates  4 Year Graduation Rates  Public Colleges 31%  Private Colleges 53%  6 Year Graduation Rates  Public Colleges 58%  Private Colleges 65% LPL Financial Member FINRA/SIPC

6 Year Graduation Rate - 2015 www.collegeresults.org  Univ. of Florida 86.5%  Univ. of Georgia 82.2%  Univ. of So. Carolina 72.7%  Univ. of Tennessee 67.5%  University of Arkansas 60.1%  GCSU 61.2%  University of North GA 52.8%  Georgia Southern 50.5% LPL Financial Member FINRA/SIPC

Research Graduation Rates  An excellent place to check graduation rates is College Completion which is a microsite of The Chronicle of Higher Education  Collegecompletion.chronicle.com

Average Cost of College (COA) per College Board 2016-2017  Public University:  In State $20,090 per year  Out of State $35,370 per year  Private University $45,370 per year  Elite Private University $68,000+ per year LPL Financial Member FINRA/SIPC

Paying for College There are two very different prices for college: one for the informed buyer & one for the uninformed buyer LPL Financial Member FINRA/SIPC

Retail vs. Wholesale  When you fly do you pay the same as the person sitting next to you?  Which seat would you rather sit in? Only I paid $119! $369 LPL Financial Member FINRA/SIPC

Financial Aid Formula COA (Cost of Attendance) - EFC (Expected Family Contribution) = FN (Financial Need) The difference between the COA and EFC numbers is your “financial need” or eligibility for financial aid at a particular school. LPL Financial Member FINRA/SIPC

Cost of Attendance (COA)  Includes direct costs to the college (tuition/fees)  Also includes indirect costs for related educational expenses  Room/Board  Books/Supplies  Transportation  Miscellaneous Living Expenses LPL Financial Member FINRA/SIPC

Expected Family Contribution (EFC)  A measure of how much the student and his or her family can be expected to contribute to the cost of the student’s education for the year  EFC is calculated by a formula specified in federal law  Factors include but are not limited to:  Assets  Adjusted gross income  Federal tax liability  Number in household  Number in college  Student’s dependency status LPL Financial Member FINRA/SIPC

Estimate Your EFC  You can attempt to estimate your Expected Family Contribution by typing EFC Calculator into the search box on the College Board’s home page.  However, it will NOT suggest or provide any guidance in strategies to potentially reduce your EFC

It matters where you keep your assets and how you pay your portion  Savings account  529 plans  Checking account  UTMA/UGMA  Money Markets  Life Insurance  Stocks  IRA  Bonds  401K/403B  Mutual Funds  Investment Real Estate  Students savings  Annuities  Home Equity LPL Financial Member FINRA/SIPC

Free Money Scholarships & Grants LPL Financial Member FINRA/SIPC

Loans  Must be paid back  Direct Loans (Stafford) - students  PLUS - parents LPL Financial Member FINRA/SIPC

Financial Aid Basics – Federal Programs  Free Application for Federal Student Aid (FAFSA)  www.fafsa.gov  The gateway for all Federal Student Aid programs  Includes student and parent loan programs LPL Financial Member FINRA/SIPC

Financial Aid Basics – Loan Programs Unsubsidized Direct Loans Direct Subsidized Loans  Interest accrues on loan  Gov’t pays interest while while student is enrolled in student is enrolled in school school at least half-time  Student has option to defer  Need-based or pay interest while in school  1.066% origination fee  1.066% origination fee withheld by US Dept. of withheld by US Dept. of Education prior to Education prior to disbursement disbursement  2017-2018 Interest Rate is  2017-2018 Interest Rate is 4.45% (fixed) 4.45% (fixed) LPL Financial Member FINRA/SIPC

Annual Direct Loan Limits Academic Maximum Annual Limit Total Annual Level that may be subsidized Limit Freshman $3500 $5500 Sophomore $4500 $6500 Junior/ $5500 $7500 Senior LPL Financial Member FINRA/SIPC

Aggregate (Lifetime) Direct Loan Limits Status Subsidized Limit Combined Limit Undergraduate $23,000 $31,000 Dependent Undergraduate $23,000 $57,500 Independent Graduate $65,500 $138,500 Student LPL Financial Member FINRA/SIPC

PLUS Loan for Parents  Apply at www.studentloans.gov  Origination Fee of 4.264%  Interest rate for 2017-2018 = 7.00%  Can borrow up to the Cost of Attendance minus other aid  Credit Check required LPL Financial Member FINRA/SIPC

Which University Is More Expensive? University A University B  COA $25,000  COA $45,000  EFC - 10,000  EFC -10,000  FN 35,000  FN 15,000  Loan 3,000  Loan 5,000  Grant 12,000  Grant 2,000  Scholarship 20,000  Scholarship 6,000  Un-Met Need 0  Un-Met Need 2,000  Real $ Cost 13,000  Real $ Cost 17,000 LPL Financial Member FINRA/SIPC

Financial Aid  Requires the understanding of:  Forms required by the school (FAFSA, Profile)  Knowing your EFC  Prudent planning strategies to increase financial aid eligibility  Need to know:  Average % of Financial Need met by the university  The university’s 4 and 6 year graduation rates LPL Financial Member FINRA/SIPC

Planning  Effective planning for financial aid occurs before filing FAFSA/Profile – NOT AFTER!  DO NOT PROCRASTINATE! - Early planning gives you the best chance to position yourself for financial aid  Learn as much as possible about the financial aid process and seek out the assistance of experts in the field for guidance LPL Financial Member FINRA/SIPC

LPL Financial Member FINRA/SIPC