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The Path to Paying for College
Click to edit Master title style Plan Ahead You are Here
Higher Education Choices • Four year college or university • Community College • Hospital school of nursing • Trade or technical school sweb.com Collegeboard.com
2016: 4-year Public - $20k - $30k • Please right click and duplicate slide. 4-year Private - $30k – over $60k 2030: 4-year Public - $40k - $60k 4-year Private - $92k - $130k cost projector at www.finaid.org
<50% % of students who graduate within 4 years. (look at collegeresults.org).
6-year grad rates Schools will advertise 6-year graduation rates to make them look better. Collegeresults.org
120 Number of credits usually required to complete a Bachelor’s Degree.
12 x 8 = 96; this means a student is already 24 credits short (an entire year!) for their 4-year credential.
The number of credits a student should consider taking MINIMALLY every semester to graduate on-time.
• EducationPlanner.org • MySmartBorrowing.org • Collegecost.ed.gov » Net-price calculators » College Scorecards
AFFORDABILITY
ROI
Think of ways to save
Click to edit Master title style Scholarships
Increase your scholarship options ❖ Organize important information that can increase your chances of obtaining scholarships ! ❖ Create a Resume ❖ What makes you stand out? ❖ Besides grades, class rank, test scores ❖ Document your information ! ❖ Academics - courses, grades, GPA, class rank, test scores ❖ Personal/Performance – sports, music, art, achievements ❖ Extra Curricular Activities – jobs, hobbies ❖ Volunteerism, Community Activities, Employment
Click to edit Master title style FAFSA
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
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)
State Grant Form First-time filers only Can also access at pheaa.org through Account Access
Click to edit Master title style Award Letters
Sorting it all out….
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?
Where does the money come from?
Gift aid (do not repay) • • Pell Grant (max $5920) PA State Grant (max $4300) » (OH, DE, MA, VT, WV, and DC) • SEOG • EAP • TEACH Grant • Chafee Grant • Iraq and Afghanistan • Blind or Deaf Beneficiary Grant Service Grant • Postsecondary Educational • Americorps Gratuity Program • PATH • GI Bill • PA TIP • RTSS For more information: studentaid.ed.gov, pheaa.org, or gibill.va.gov
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
$37,000 Average student indebtedness for graduates of the class of 2016.
What does a $1 million look like?
What does $1 Trillion look like?
Repayment Examples It is estimated that you would need an annual salary of $44,928 to be able to afford this loan payment. Source: finaid.org
Repayment Examples It is estimated that you would need an annual salary of $22,264 to be able to afford this loan payment. Source: finaid.org
Opportunity Cost
Opportunity Cost What if the student invested the extra $200 per month for 10 years instead into a Roth IRA? Source: bankrate.com
Opportunity Cost What if they never invested another penny but saved it until retirement 40 years late (age 72). Source: bankrate.com
Direct Stafford Loans StudentLoans.gov Subsidized v. Unsubsidized Interest is currently 3.76% (adjusted annually); capped at 8.25% Fee is currently 1.069% (if you borrow $5500, $5441.26 is applied to the bill) Should try to pay interest on unsubsidized loans
Direct Stafford Loans
Direct Stafford Loans
Parent Loan for Undergraduate Students (PLUS) • Parent borrows a loan for the student » 6.31% interest rate for 2016-17; interest capped at 10.50% » Up-front fee of 4.276% 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
Click to edit Master title style Decide
Review and consider all of your options. Sometimes the best fit is not your first choice.
Deciding
What should you do now?
Summer • Make up academic work Summer • Take prerequisite classes • Job Shadow • Participate in summer enrichment programs • Visit colleges • •
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)
Use Your Resources • PHEAA.org • EducationPlanner.org & MySmartBorrowing.org • YouCanDealWithIt.com • MyFedLoan.org • PHEAA toll free: 800.692.7392 • Federal Student Aid Info Center – 800.433.3243 • FASFA.gov • StudentAid.gov – general financial aid info • StudentLoans.gov – information on federal loans
Contact Information Kim McCurdy kmccurdy@pheaa.org
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