Financial Wellness Curriculum

1
(No Transcript)
2
Financial Wellness Curriculum
Understanding Financial Aid

• More information available at YouCanDealWithIt.com
  
• This presentation has been developed by and paid
  for by AES.

3
Understanding Financial Aid Objectives

• Understanding financial aid
• Types of financial aid
• Using student loan money wisely
• Grace period
• Student loan repayment
• Resources

4
Understanding Financial Aid

• Financial aid allows you to obtain a college
  education. As a responsible student you should be
  able to answer these questions
• What type(s) of financial aid do you have?
• What is the renewal process for your aid types?
• Does your aid have specific requirements such as
  GPA or employment specifications?
• What type of aid has to be repaid?
• When does repayment begin?
• What are your rights and responsibilities?

5
Grants

• Federal and state grants provide students with
  financial assistance and in most cases, do not
  have to be repaid.
• Eligibility Requirements
• Meet criteria for financial need
• Be enrolled at least half-time
• Be a high school graduate or the recipient of a
  GED
• (General Education Development )
• Demonstrate academic progress for continued aid
• Apply for state and federal grants by completing
  the FAFSA application

6
Grants

• Two of the most common Federal grant programs
  are
• Pell Grant
• Supplemental Educational Opportunity Grant (SEOG)
• State grant programs vary by state
• Pennsylvania grants include
• Pennsylvania State Grant Program
• WAGE Program

7
Scholarships

• Scholarships are often based on academic merit,
  pursuit of a specific program of study, special
  talents, or participation in athletics.
• Awarded by state or federal agencies or by
  local businesses and organizations
• Federal Scholarships
• Robert C. Byrd Honors Scholarship
• Pennsylvania State Scholarships
• Technology Scholarship
• PHEAA Academic Excellence Scholarship Program
• Pennsylvania Higher Education Foundation

8
Scholarships

• EducationPlanner.org has one of the largest free
  scholarship databases in the country
• Its not just for freshmen, so use it your entire
  college career

9
Work Study

• State and Federal Work-Study programs provide
  jobs for students who demonstrate need. Salaries
  are paid by funds from the federal government and
  by the college.
• There are many benefits to participating in the
  work study program while in school
• Gain experience working in your field of study
• Network with people in your field of study
• Convenience of working on campus
• Check with your school to see what work study
  opportunities are available.

10
Federal Stafford Loans

• Federally Guaranteed
• Loans made to students through AES or another
  private lending institution
• Long term, low interest rate loans
• Can be either Subsidized or Unsubsidized
• Complete the FAFSA to apply
• Sign and return the Federal Stafford Loan Master
  Promissory Note (MPN) sent to you by your
  guarantor or school

11
Federal Stafford Loans

• Lender
• The financial institution (bank or credit union)
  you chose when applying for your student loan
  from
• Servicer
• The organization who manages the student loan on
  the lenders behalf which includes
• Receiving and processing payments
• Reviewing requests for deferment and forbearance
• Answering questions about your loans
• Address and phone updates
• Guarantor
• An agency, like AES, who insures the student loan
  funds will not default and will be repaid
  according to the federal regulations
• In the event you would default on your loan, the
  guarantor has the right to purse you to the
  fullest extent of the law to ensure the debt is
  repaid

12
Federal Stafford Loans

• Master Promissory Note
• Must be signed before you receive your loan
• Usually signed once and can be used for multiple
  loans
• Legally binding contract between you and the
  lender of the loan
• States that you will repay the loan according to
  specific terms
• Students may request in writing that their
  multi-year MPN only be used once and sign a new
  MPN for each additional loan.

13
Federal Stafford Loans

• Eligibility Requirements
• Complete the FAFSA application for the
  appropriate academic year
• Be a U.S. citizen or eligible non-citizen
• Be accepted for enrollment in a participating
  school or, if enrolled, be making satisfactory
  progress
• Be classified as at least a half-time student
  working toward a degree or certificate
• Not be in default on an education loan
• If required, be registered with the selective
  service
• Have financial need in order to receive a
  Subsidized Stafford loan

14
Federal Stafford Loans
15
Federal Stafford Loan Limits
Or dependent students whose parents cannot
obtain a PLUS loan due to exceptional
circumstances. PLUS loans for graduate or
professional are available
16
Perkins Loans

• Disbursed by the attending school
• Need-based
• May only be used for educational expenses
• Interest does not accrue while you are in school,
  during your grace period, or during deferment
  periods
• The interest rate is fixed at 5

17
Alternative Loans

• Student loans that work more like common types of
  debt
• Larger up-front fees
• Higher interest rates
• More stringent repayment terms
• Must be creditworthy
• These loans are not borrowed from the government,
  but rather directly from a lender and without
  certain benefits offered through federal student
  loan programs.

18
Using Your Student Loan Money Wisely

• Use it for school-related expenses only
• Tuition
• Housing
• Books
• Transportation
• Food
• Send any over award back to your servicer, dont
  use it to finance a life style.

19
Grace Period

• Begins when you graduate, withdraw or drop to
  less than half-time status
• You only get one and it only lasts 6 months
• During this time you will receive your repayment
  obligation which includes
• Date payments are to begin
• Payment is expected even if you do not receive a
  payment booklet or monthly statement
• Monthly installment amount
• Repayment terms
• Current principal balance
• Interest rate

20
Student Loan Repayment Plans

• Level Repayment Schedule
• Loan Balance 24,000.00
• Loan Interest Rate 6.80
• Loan Term 10 years (120 months)
• Monthly Loan Payment 276.19
• Number of Payments 120
• Total Repayment Amount 33,143.28
• Total Interest Paid 9,143.28

21
Student Loan Repayment Plans

• Graduated Repayment Schedule
• Loan Balance 24,000.00
• Loan Interest Rate 6.80
• Loan Term 10 years (120 months)
• 194.92 for 24 months
• 233.90 for 24 months
• 280.68 for 24 months
• 336.81 for 24 months
• 404.17 for 24 months
• Total repayment amount 34,811.73
• Total interest paid 10,811.73

22
Student Loan Repayment Plans

• Income Sensitive Repayment Schedule
• Loan Balance 24,000.00
• Loan Interest Rate 6.80
• Loan Term 120 months
• 140.00 for 12 months
• 297.11 for 108 months
• Total repayment amount 33,766.77
• Total interest paid 9,766.77

23
Student Loan Repayment Plans

• 25-Year Extended Repayment Schedule
• Your current loan balance must be at least
  30,000.00.
• Your first loan must have been disbursed on or
  after October 7, 1998.
• If you qualify, you can request this schedule to
  either be set up on a Level or Graduated
  Repayment plan.

24
Student Loan Repayment

• Loan Consolidation
• Reduce your monthly payments by extending your
  repayment period
• Combine all of your student loans with various
  lenders into one monthly payment
• Fixed interest rate
• Do your homework to determine if consolidation is
  the most beneficial option for you

25
Student Loan Repayment

• Automated Payment Service
• Many lenders will offer a free automatic
  electronic payment service
• Most lenders offer reduced interest rates for
  automatic payments
• Payments are deducted from your designated
  account each month on time
• Some lenders offer additional interest rate
  reduction after a specified number of on-time
  payments

26
Student Loan Repayment

• Loan Forgiveness Programs
• Federal Loan Forgiveness programs
• Federal Child Care Provider Loan Forgiveness
• Federal Teacher Loan Forgiveness
• Armed Forces Loan Forgiveness
• Pennsylvania State Loan Forgiveness programs
• Agriculture Education Loan Forgiveness

27
Student Loan Repayment

• Deferment and Forbearance
• If you are unable to send payments during the
  repayment period of your student loan call your
  lender or servicer immediately
• You may qualify for a temporary suspension of
  payments
• Avoiding the problem is not a solution call for
  help

28
Student Loan Repayment

• Delinquency
• Failing to make your scheduled monthly loan
  payments will negatively effect your credit
• Late payments stay on your credit history for up
  to 7 years
• Your lender/servicer, guarantor and school will
  begin contacting you via letters and phone calls
  which will continue until you resolve the
  delinquency.

29
Student Loan Repayment

• Remember YOU have the power to fix the problem
• Repayment tips
• Always forgetting to send your payment?
• Sign-up for automated payments and never worry
  about sending a check again
• Realized you forgot to put the check in the mail
  the day before it is due?
• Make the payment online.
• Your student loan is due the same pay period as
  your car?
• Call and ask your servicer if you can change the
  due date
• Your payments are too high?
• Check out youcandealwithit.com or call your
  servicer to discuss other repayment options
• Consider consolidation

30
Student Loan Repayment

• Default Consequences
• Serious damage to your credit score for a period
  of 7 to 10 years
• Garnishment of your wages
• Subject to a 19 collection fee
• Seizure of income tax returns
• No longer eligible for deferment or forbearance
• Loss of eligibility for financial aid

31
Important Reminders

• It is important to understand your schools
  academic progress policy, refund policy and how
  the return of Federal Student Aid funds will
  effect your loan repayment.
• When you cease to be enrolled at least half time,
  you will be required to complete exit counseling.

32
Use your resources

• Get organized
• Keep all your financial records together
• Know your Lender/Servicer contact information
• Make sure your lender/servicer is always informed
  of name and address changes as well as your
  enrollment status
• Keep your PINs in a safe place
• Financial aid has varying deadlines use a
  planner to keep track of important dates

33
Understanding Financial Aid Objectives

• Understanding financial aid
• Types of financial aid
• Using student loan money wisely
• Grace period
• Student loan repayment
• Resources

34
(No Transcript)