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 1st) Apply by November 15th to meet most priority deadlines

 How?

Parents and students complete the Free Application for Federal Student Aid

(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!!

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

Resource #3: Savings

College costs continue to rise

National Average College Attendance Costs 2018 – 2019*

Tuition & Fees Room & Board Books & Supplies Annual Basic Expenses Private College or University $35,830 $12,680 $1,240 $49,750 Public University (In-State) $10,230 $11,140 $1,240 $22,610 Community College (In-State) $3,660 8,660 $1,440 $13,760

*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

$20,931 $49,164 $87,246 $138,612 $6,977 $16,388 $29,082 $46,204 $8,194 $14,541 $23,102

$0 $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000 5 Years 10 Years 15 Years 20 Years

Monthly Investment at a 6% Annual Return $300 $100 $50

$3,489

Better to Save and Borrow Less

$0.00 $5,000.00 $10,000.00 $15,000.00 $20,000.00 $25,000.00 $30,000.00 $35,000.00 $40,000.00 $45,000.00

Pay $375.24/mo for 10 Years @ 5% Save $200/mo for 11 Years @ 5%

Need: $35,000 for College Solution: Save or Borrow?

Borrow Save

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.

*Source: Savingforcollege.com

Member of the Family

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

Thank you for attending!

Arizona Family College Savings (529) Program

Deena Lager Email: dlager@azhighered.gov Website: www.az529.gov Facebook: AZCollegeSavings 19