Funding a College Education

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Funding a College Education

• Presented by Linda Walker

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Five Steps to Save, Plan, Pay for Education

• We know that the planning for college process
  can be overwhelmingThats why were here to
  help.
• 5 Steps to Save, Plan, Pay for education
• Saving for college
• Selecting your school
• Determining cost
• Calculating financial need
• Paying for college

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Step 3 Determining cost

• Generally there are two types of college costs
  direct costs and indirect costs.
• Direct costs are assessed by the school and vary
  little from student to student.
• Indirect costs are those that you can influence
  based on choices you make.
• Direct Costs
• Tuition
• Fees (health center, student activity, special
  campus fees, etc)
• On-campus room and board (including meal plan)
• Indirect Costs
• Books and supplies
• Equipment (art fees, athletics, computers, etc)
• Transportation (costs associated with travel to
  and from school)
• Personal living expenses (spending money for
  pizza, movies, etc)
• Off-campus room and board

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Step 3 Determining cost

• Cost of Attendance (COA)
• Unique to each College and is used to calculate
  financial need
• Direct Costs
• Indirect Costs
• __________________
• Cost of Attendance (COA)
• COA, calculated and applied each year of
  enrollment, is the estimated total amount it will
  cost a student to attend a particular college.
  Schools that award federal financial aid all use
  the same formula.

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Step 3 Determining cost
The Education Investment Planner

• Sallie Maes paying for college forecasting tool!
  
• Helps answer
• How much could college cost?
• How do I compare the cost of attendance for
  various colleges?
• What are different ways I can pay for college?
• If I take out student loans, what might the
  estimated monthly payment be after my child
  graduates?

Start your plan today SallieMae.com/Plan
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Step 3 Determining cost
The Education Investment Planner
Estimate cost of Attendance for all 4 years
SallieMae.com/Plan
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Step 4 Calculating financial need

• Need-Based vs. Merit-Based Financial Aid
• Need-based aid
• Largely driven by income
• Need to apply using federal application
• Merit-based aid
• Based on the merits of the student
• Federal application NOT required

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Step 4 Calculating financial need

• The FAFSA calculates the Expected Family
  Contribution (EFC)
• EFC How much your family is expected to
  contribute toward college education for one year
  as determined by the FAFSA.
• EFC is determined by
• Parent and student available income
• Parent and student available contribution from
  assets
• Household size
• Number of children in college

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Step 4 Calculating financial need

• EFC Factors
• Investments included on the FAFSA
• Trust Funds
• Uniform Gifts for Minors Act accounts
• Uniform Transfer to Minors Act accounts
• Money Market Funds, Mutual Funds and CDs
• Stocks, stock options and bonds
• Other Securities
• Installment and land sale contracts (including
  mortgages held)
• Commodities
• 529 Plans
• Source The U.S. Department of Education,
  2009-2010 FAFSA

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Step 4 Calculating financial need

• EFC Factors
• Investments NOT included on the FAFSA
• Home you live in
• Value of Life Insurance
• Retirement Plans (401K plans)
• Pension Funds
• Annuities
• Non-education IRAs
• Keogh Plans
• Source The U.S. Department of Education,
  2009-2010 FAFSA

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Step 4 Calculating financial need

• Estimate your EFC
• No need to wait until the Student Aid Report
  (SAR) arrives to learn your EFC.
• Use Sallie Maes EFC Calculator to estimate Your
  EFC today!
• Estimate your EFC during the Junior year after
  you complete your taxes

SallieMae.com/EFC
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Step 5 Paying for education

• Free
• 529 and College Savings Plans Money that you
  save
• Gift or Grant aid Money that does not have to be
  repaid
• Scholarships FREE Money
• Federal
• Work-study Money earned by working
• Student Loans and Parent Loans Money borrowed
  that must be repaid
• Private
• Loans Money borrowed that must be repaid

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Step 5 Paying for education

• Federal Grants
• Pell Grant
• Award amount is determined by student/parent
  information entered into the federal application.
• Award amounts range from 600 to 6,000 per
  year
• SEOG (Supplemental Educational Opportunity) Grant
• Must be eligible for Pell Grant
• Award amounts are determined by the college
• Limited funds available
• Academic Competitiveness Grant
• Awarded to first and second year college
  students
• Must be eligible for Pell Grant
• Complete a rigorous program of study in high
  school
• Award amounts are 750 for 1st year 1,300
  for 2nd year.

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Step 5 Paying for education

• AIMS Tuition Waiver
• What is a Rigorous Program of Study?
• In Arizona there are four Recognized Rigorous
  Secondary School Programs of Study. The most
  common is
• The Arizona State Scholars Initiative
• Four credits in English (English 1 4)
• Three credits in math (Algebra I, Algebra II and
  Geometry)
• Three credits in lab science (biology, chemistry,
  physics or physical science)
• Three credits in social studies (geography, world
  history, U.S. history, U.S. government/civics,
  and economics)
• Two credits in a language other than English
• All other school district graduation requirements
  
• C or better grades in Scholars courses.
• For more information on this grant, visit
• www.ed.gov/about/offices/list/ope/ac-smart.html

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Step 5 Paying for education

• National Science and Mathematics Access to Retain
  Talent (SMART) Grants
• A National SMART Grant will provide up to 4,000
  for each of the third and fourth years of
  undergraduate study to full-time students who are
  eligible for a Federal Pell Grant and who are
  majoring in physical, life, or computer sciences,
  mathematics, technology, or engineering or in a
  foreign language determined critical to national
  security.

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Step 5 Paying for education

• Gift Aid
• Scholarships
• Usually merit-based and awarded for a variety of
  reasons including
• Academic achievement
• Financial need
• Community involvement
• Organizational membership
• Sports
• Talent or skill
• Leadership/school activities
• Ethnicity
• Religious affiliation
• Parent affiliation with work, club, or activity
• Scholarships do not need to be repaid and are
  typically awarded on an annual basis. While the
  federal and state governments award some
  scholarships, the majority of funds are awarded
  by the institution in which students enroll and
  by private organizations.

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Step 5 Paying for Education
Tips for Finding Scholarships
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Step 5 Paying for Education

• Tips for Finding Scholarships
• When searching for scholarships
• Use an online search, SallieMae.com/scholarships
• Contact your high school guidance counselor for
  local scholarships
• Look at the colleges the student is considering
  attending to see what scholarships they offer
• Remember many scholarships are just for seniors
  and enrolled college students, but high school
  juniors can still plan ahead by seeing what will
  be available for the following year.

FREE Online Scholarship Search College Answer
offers one of the largest, free scholarship
searches on the Web with over 3 million awards
worth more than 16 billion! Also available
in Spanish!
SallieMae.com/Scholarships
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Step 5 Paying for Education
Are you on Facebook? So is the Sallie Mae
scholarship search
Facebook.com-SallieMaeScholarships
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Step 5 Paying for education

• Federal Work-Study
• Need-based, self-help aid
• Federal program
• Jobs arranged through school
• On or off campus
• Pays at least minimum wage
• Limited hours
• May be tied to academic interests or major
• Income from previous years is not used in
  figuring your EFC
• Often there are a wide variety of work-study jobs
  on each campus.

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Step 5 Paying for Education
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Step 5 Paying for education

• Who is Eligible for Federal Financial Aid
• U.S. Citizen or U.S. Permanent Resident (with
  alien registration number)
• Have a valid Social Security Number
• Have a High School Diploma or GED
• Enrolled or plan to be enrolled in college AND
• Be working toward a program of study
• Be registered with selective service (males
  between ages 18-25)
• www.sss.gov

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Applying for Federal Financial Aid

• Begin by applying for your PIN Number
• www.pin.ed.gov
• Will allow students and parents sign their
  application online
• Never expires
• Both the Student and the Parent will a PIN number

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Applying for Federal Financial Aid

• Complete the FAFSA (Free Application for Federal
  Student Aid)
• Available after January 1st
• www.fafsa.gov

• FAFSA Web Worksheet
• Optional
• Help you collect the information you need to
  fill out the application

Make sure you submit the FAFSA then make sure
you receive your confirmation number
Must be completed each year the student is in
college
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Free Application for Federal Student Aid (FAFSA)

• This is the form the Federal Government uses to
  determine your Expected Family Contribution (EFC)
• Familys personal and financial information is
  collected on the FAFSA and is required by the
  government to perform a need analysis
• An EFC is not an estimate of left-over
  resources from family finances once other
  responsibilities are met

If you plan to attend college Fall 10, apply
after Jan. 1, 2010 (current HS Seniors) If you
plan to attend college Fall 11, apply after Jan.
1, 2011 (current HS Juniors)
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There Is Free Help Available

• FAFSA Online
• There are help buttons on every page of the
  online application.
• Live Help button to chat with customer service
  (8am midnight) EST
• By Phone
• 1(800) 433-3243 FAFSA Hotline
• In Person
• High School Counselor
• Local College / University Financial Aid Office

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Free Application for Federal Student Aid (FAFSA)

• Dependent vs. Independent
• An independent student is
• At least 24 years of age by December 31st of
  award year or
• A graduate or professional student or
• Married or
• Has legal dependents other than a spouse or
• Orphan, homeless or ward of the court (foster
  child) or
• Veteran of the U.S. Armed Forces or
• In special cases, determined to be independent by
  the financial aid administrator
• Otherwise, the student is dependent!

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Free Application for Federal Student Aid (FAFSA)

• FAFSA and Your Family
• Divorced/remarried parent information
• Income earned by parents/stepparents
• Must have legal documentation (adoption) to
  consider someone other than natural parents as
  your parent
• For example if you live with grandparents,
  aunts, uncles, friends of family
• Legal Guardians are not considered to be a
  students parents
• Household size include the student in parents
  household size, even if the student did not live
  with the parents the previous year (student has
  own apartment but is still considered dependent)

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What Happens Next?
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The SAR (Student Aid Report)

• You will receive it usually 2 to 4 weeks after
  you submit the FAFSA
• Via Email or U.S. Mail
• Will itemize information that you listed on the
  FAFSA

• Why its Important
• Review for corrections
• Save for the whole academic year

• The EFC (Expected Family Contribution) Number
• What the government expects student/parent(s)
  to contribute toward educational costs.
• Financial Aid Office uses number to determine
  aid eligibility

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What Happens Next?
Role of the Financial Aid Office
Determines cost of attendance Varies by where the
student lives (on/off campus vs. with
parents) Packages aid based on familys EFC and
cost of attendance Sends an award notification
which includes Students cost of
attendance Amount of students financial
need Types and amounts of aid offered How and
when aid will be disbursed Terms and conditions
of aid offer Student employment conditions
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What If Financial Aid Isnt Enough?

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CSS (College Scholarship Service) Profile

• Some colleges and universities use it to select
  students for nonfederal student aid funds.
• All students are charged for the initial
  application. This covers the costs of creating
  your PROFILE Application and the first school
  report. You will be charged for each additional
  college or program to which you want information
  sent.
• Priority Dates will vary by college. To see if
  the college you plan to attend requires a CSS
  Profile, visit
• https//profileonline.collegeboard.com/prf/index.j
  sp

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Step 4 Calculating financial need
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The information contained in this presentation is
not comprehensive, is subject to constant change,
and therefore should serve only as general,
background information for further investigation
and study related to the subject matter and the
specific factual circumstances being considered
or evaluated.  Nothing in this presentation
constitutes or is designed to constitute legal
advice.