Paying for Postsecondary Education How much? 2016: Please right - - PowerPoint PPT Presentation

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Paying for Postsecondary Education How much? 2016: Please right - - PowerPoint PPT Presentation

May 23, 2023 294 likes •949 views

Paying for Postsecondary Education How much? 2016: Please right click and duplicate slide. 4-year Public - $20k - $30k 4-year Private - $30k over $60k 2030: 4-year Public - $40k - $60k 4-year Private - $92k - $130k cost projector at

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Paying for Postsecondary Education

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How much?

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  • Please right click and duplicate slide.

2016: 4-year Public - $20k - $30k 4-year Private - $30k – over $60k 2030: 4-year Public - $40k - $60k 4-year Private - $92k - $130k

cost projector at www.finaid.org

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<50%

% of students who graduate within 4 years. (look at collegeresults.org).
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6-year grad rates

Schools will advertise 6-year graduation rates to make them look better. Collegeresults.org
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120

Number of credits usually required to complete a Bachelor’s Degree.
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12 x 8 =

96; this means a student is already 24 credits short (an entire year!) for their 4-year credential.
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15+

The number of credits a student should consider taking MINIMALLY every semester to graduate on-time.
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Plan Ahead

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AFFORDABILITY

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ROI

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How much will I have to borrow for school? What do I want the rest of my life to look like? What do I want to have? How do my decisions now affect my vision for my future?

Will there be jobs available in my chosen field?

Will I be able to afford my monthly loan payments? Does a cheaper option make sense if my family is struggling to pay?

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Resources

  • EducationPlanner.org
  • Collegecost.ed.gov

» Net-price calculators

  • MySmartBorrowing.org
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Scholarships

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It’s never too early to find free money!

  • Start early and keep looking
  • Check with school counselor about local
  • pportunities
  • Google your interests
  • Activities, Athletics, Family, Hobbies,

Participation, Attributes – Do your research!

  • Don’t miss deadlines!
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SLIDE 22 Average number of scholarships that senior students apply for in high school.
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FAFSA

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FAFSA.gov

Apply after October 1 (of senior year in hs) It’s the student’s application
  • Parent sections
2017-18 will use 2015 tax information
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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)

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Whose information goes on the FAFSA?

  • Divorced or separated parents -

the parent that provides more than 50% of students support (household)

  • Stepparents – yes
  • Adoptive parents - yes
  • Grandparents – no
  • Foster parents - no
  • Legal guardians - no
  • Anyone else the student is living

with - no

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Independent Students are:

  • 24 or older on Jan 1st of

award year (this year before 1992)

  • Veteran (includes active duty

personnel)

  • Working on graduate degree
  • Emancipated minor in legal

guardianship

  • Orphan, in foster care, or

ward of the court at anytime when student was age 13 or

  • lder
  • Have legal dependents other

than spouse

  • Student deemed homeless

by proper authority

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Know your deadlines!

Schools have priority filing deadlines. State Grant deadline is: May 1 - First Time and Renewal Applicants that plan to enroll in a degree program or a college transferable program at a junior college

  • r other college or university

August 1 - First Time applicants that plan to enroll in a community college; a business, trade, or technical school; a hospital school of nursing; or a 2-year program that is not transferable to another institution

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Expected Family Contribution (EFC)

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Expected Family Contribution (EFC)

  • Student and Parent Contribution
  • Bulk of EFC comes from income
  • Assets exclude: value of home you

live in, personal property, retirement, and life insurance.

  • Assets include (but not limited to):

value of cash, savings, and checking, investment accounts, 529 plans, rental property, etc.

  • Parent asset contribution = roughly

6%

  • Student income contribution = 50%
  • f amount over $6,420; assets at

20%.

  • Parent contribution divided by

number of children in college at the same time

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State Grant Form

First-time filers Can also access at pheaa.org through Account Access
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Award Letters

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Financial Need

Schools/colleges receive financial aid information and calculate financial need. School cost……………………. $30,000 EFC…………………………….. - $ 3,000 Financial need………………… $27,000 FAO “packages” student based on financial need and available funding (varies from school to school). Financial aid award letter sent to student.

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Sorting it all out

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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

  • we the

school?

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Where does the money come from?

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Gift aid (do not repay)

  • Pell Grant (max $5815)
  • SEOG
  • TEACH Grant
  • Iraq and Afghanistan

Service Grant

  • Americorps
  • GI Bill
For more information: studentaid.ed.gov, pheaa.org, or gibill.va.gov
  • PA State Grant (max $4300)

» (OH, DE, MA, VT, WV, and DC)

  • EAP
  • Chafee Grant
  • Blind or Deaf Beneficiary

Grant

  • Postsecondary Educational

Gratuity Program

  • PATH
  • PA TIP
  • RTSS
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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

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$37,000

Average student indebtedness for graduates of the class of 2016.
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What does a $1 million look like?

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What does $1 Trillion look like?

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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
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Repayment Examples

Source: finaid.org

It is estimated that you would need an annual salary of $22,264 to be able to afford this loan payment.

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Studentloans.gov

Log in with your FSA ID and complete your Master Promissory Note (MPN) and Entrance Counseling.

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Direct Stafford Loans

» Subsidized – no interest while in school

  • Interest will be charged after an interest-free, 6-

month-grace period

  • 3.76% fixed rate for loans between 7/1/16 and

6/30/17

  • *1.069% origination fee deducted at disbursement

» Unsubsidized – interest accrues in school and grace

  • 3.76% fixed rate for loans between 7/1/16 and

6/30/17

  • *1.069% origination fee deducted at disbursement
» *Gross loan amount of $5500 will be $5441.20 » Interest rate adjusted annually and capped at 8.25%
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Calculating Accrued Interest

To calculate your daily interest accrual, use the following formula:

  • Interest rate x current principal balance ÷ number of days in the

year = daily interest Example: Sara Student has a $2,000 current principal balance and 3.76% interest rate this year. Using the formula:

  • .0376 x $2,000 ÷ 365 = $0.21 (~$18.90 quarterly interest)

What if she borrowed $10,000?

  • .0376 x $10,000 ÷ 365 = $1.03 daily (~$93 quarterly interest)
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Loan Servicer

myfedloan.org navient.com mygreatlakes.org nelnet.com
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Stafford Loan Limits

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Stafford Loan Limits

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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
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Private/ Alternative Loans

  • Nonfederal loans, made by a

lender such as a bank or credit union.

  • Student is the borrower. Co-signers usually
  • required. Some loans have a co-signer release.
  • Based on credit scoring and debt-to-income

ratio.

  • Fees, interest rates, loan amounts, and

repayment provisions vary by lender.

  • Compare loans before choosing and read the

fine print.

  • Loan of Last Resort.
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Decide

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Deciding

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Review and consider all of your

  • ptions. Sometimes the best fit

is not your first choice.

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Determining Affordability

  • Approach this process as you are buying an

EDUCATION.

  • Apply everywhere you want, but be open

minded and give yourself options.

  • Think in terms of yesterday’s money, today’s

money, and tomorrow’s money.

  • Have discussions as a family.
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  • Out-of-pocket?
  • Expendable

income/sign up for a payment plan?

  • Scholarships?
  • Parent loans? (*home-

equity line of credit)

  • Double check with the

school (additional institutional money, scholarship opportunities, institutional loans).

Ways to Pay

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Ways to Save

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Beware of the 5 or 6 year plan!

  • 5th year will cost 20-25% more than your first

year.

  • Loss of institutional funds after 4 years.
  • Loss of State Grant eligibility after 4 years.
  • You will run out of federal loan eligibility (capped

at $31,000 for undergraduate students).

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What should you do now?

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Timeline

  • Apply for admission starting in

September of senior year in hs

  • Apply for financial aid starting October 1
  • f 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

  • ther savings?
  • Has anything changed since you filed the FAFSA? (divorce, job

loss, death of parent)

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Resources

  • FAFSA.gov

» Questions about FAFSA or FSA ID

  • 800.433.3243
  • PHEAA.org

» Questions about the State Grant Form

  • 800.692.7392
  • Educationplanner.org
  • Mysmartborrowing.org
  • Studentloans.gov – information on federal

loans

  • Nslds.ed.gov – information on your

specific federal loans

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Presenter Information

Kim McCurdy Higher Education Access Partner PHEAA kmccurdy@pheaa.org

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