How to Pay for College Brentwood High School Tuesday, September 27, 2011 Did you know? According to the National Center for Education Statistics, there are over 17 million students attending college each year; only 20 percent pay for the cost without aid of some sort Part I: The Big Picture What do you think is the first and most important source of money to pay for college? • • • Government? Scholarships. Loans. What is the next biggest source of money to pay for college? • The correct answer is the federal government. Last year the federal government gave $125 billion in student aid. What is the intent of this money? To bridge the gap between what college costs and what students can afford to pay. How much College Costs Cost of Attendance - What you Can Afford = The Gap - Estimated Family Contribution = Your Need Cost of attendance Cost of Attendance ≠ Tuition How much college costs includes: •room and board •Insurance •transportation •books •lab fees Estimated Family Contribution How much can you afford to pay for college? The Government determines your EFC. FAFSA Free Application for Federal Student Aid So...you take the cost of attendance, and you subtract your EFC, you arrive at your „need.‟ Federal student aid is designed to meet that need. What is your need? College 1 College 2 College 3 COA: 10K COA: 20K COA: 40K EFC: 9K EFC: 9K EFC: 9K Your Need: 1K Your Need: 11K Your Need: 31K The Government determines your EFC The Financial Aid Office determines your Award Package Scenario #1 College 2 College 3 COA: 20K EFC: 9K COA: 40K EFC: 9K Your Need: 11K Your Need: 31K Award package = $11,000 Award package = $25,000 Which college offered the bigger package? Which is the better package? Scenario #2 College 2 College 3 COA: 20K EFC: 9K Your Need: 11K COA: 40K EFC: 9K Your Need: 31K Award package = $7,000 Award Package = $31,000 Which college is more affordable? Three Types of Aid • Grants – money you don‟t have to pay back. • Work-study – part-time job at school. • Loans – aid you must pay back. Federal Loans • Perkins Loan – lowest interest rates but only offered to students with exceptional financial need. • Stafford Loan – most likely what you will be offered when you apply – Subsidized – gov‟t will pay the interest on the loan while you are in schools. – Unsubsidized – gov‟t does not pay interest • Parent PLUS Loan – parents can borrow as much as neeed up to cost of attendance – Repayment begins 60 days after money is disbursed Scholarships • Merit based aid • Many different kinds of merit “I hear that there are millions of dollars in award money that go unclaimed each year.” TRUE OR FALSE? False! • Most scholarships come from schools directly. • Some outside organizations offer scholarships that can be applied to any school. • Scholarships will most likely NOT cover all your education costs. Part II. Taking Action 1) What students need to do 2) When they need to do it Searching for Scholarships • • • • Check the schools they are applying to. Use the internet. Check their high school. Other potential sources – – – – – Community organization? Religious affliation? Local chapter of national club? Parent(s) in a union? Parent(s) work for a large corporation? • PAY ATTENTION TO DEADLINES www.PrincetonReview.com/scholarshipsearch Applying for Financial Aid • Visit school websites – All colleges want FAFSA – Some 600 colleges now require an additional form call the CSSProfile – Some schools want to see tax returns – Some schools have their own forms • The FAFSA – January 1st of senior year – Asks for info directly from taxes – Online is easiest • Check your results – Student Aid Report (SAR) • Appealing your award Securing a loan Five things to consider when choosing a lender: • Interest rate • Associated fees • Repayment terms • Incentives for the borrower • Schedule for repayment Private Loans If you still need more money for your education, you can take our a private loan. • Save this as a last option • Private loans have a variable rate and your credit score can influence the rate • Make sure to shop around! Questions? Thank you!
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