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

By: Scott Kessler LPL Financial SmartCollegeFunding.com

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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

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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

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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

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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

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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

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Graduation Rates

4 Year Graduation Rates

 Public Colleges 31%  Private Colleges 53%

6 Year Graduation Rates

 Public Colleges 58%  Private Colleges 65%

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6 Year Graduation Rate - 2015

 Univ. of Florida  Univ. of Georgia  Univ. of So. Carolina  Univ. of Tennessee  University of Arkansas  GCSU  University of North GA  Georgia Southern

86.5% 82.2% 72.7% 67.5% 60.1% 61.2% 52.8% 50.5%

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www.collegeresults.org

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

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Paying for College

There are two very different prices for college:

• ne for the informed buyer &
• ne for the uninformed buyer

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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?

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Only $119!

I paid

$369

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.

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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

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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

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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  Checking account  Money Markets  Stocks  Bonds  Mutual Funds  Students savings  Home Equity  529 plans  UTMA/UGMA  Life Insurance  IRA  401K/403B  Investment Real Estate  Annuities

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Free Money

Scholarships & Grants

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Loans

 Must be paid back  Direct Loans (Stafford) - students  PLUS - parents

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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

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Financial Aid Basics – Loan Programs

Direct Subsidized Loans

 Gov’t pays interest while

student is enrolled in school at least half-time

 Need-based  1.066% origination fee

withheld by US Dept. of Education prior to disbursement

 2017-2018 Interest Rate is

4.45% (fixed)

Unsubsidized Direct Loans

 Interest accrues on loan

while student is enrolled in school

 Student has option to defer

• r pay interest while in

school

 1.066% origination fee

withheld by US Dept. of Education prior to disbursement

 2017-2018 Interest Rate is

4.45% (fixed)

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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

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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

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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

• ther aid

 Credit Check required

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Which University Is More Expensive?

 COA

$25,000

 EFC

• 10,000

 FN

15,000

 Loan

5,000

 Grant

2,000

 Scholarship

6,000

 Un-Met Need 2,000  Real $ Cost 17,000

 COA

$45,000

 EFC

• 10,000

 FN

35,000

 Loan

3,000

 Grant

12,000

 Scholarship 20,000  Un-Met Need  Real $ Cost 13,000

University A University B

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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

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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

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