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Planning and Paying for College. Grants, Scholarships, Loans and Other Money for College

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(1)

Planning and Paying for

College

Grants, Scholarships, Loans and Other Money for College

(2)

10 Important Things to Qualify

1. Submit the FAFSA 2. Submit any other

applications

3. Demonstrate financial need

4. Have a high school

diploma or equivalent 5. Be a U.S. citizen or

eligible noncitizen

6. Be a state resident 7. Enroll in an eligible

degree or certificate program

8. Maintain satisfactory academic progress 9. Have a SSN

10. Register with U.S.

Selective Service

(males 18-25)

(3)

Types of Financial Aid

Grants: money you don’t have to repay, typically based on financial need.

Scholarships: free money, usually based on your area of study or merit.

Work-study or student employment programs: federal and college.

Loans: borrowed money that you must

pay back, usually with interest.

(4)

Free Money from the Government

■ Federal Pell Grant

♦ up to $5,550 a year

■ Federal Academic Competitiveness Grant

♦ up to $750 first-year students; $1,300 for second year

■ Federal Supplemental Educational Opportunity Grant

♦ up to $4,000 a year

■ National SMART Grant

♦ up to $4,000 junior and senior year

■ Robert C. Byrd Honors Scholarship

♦ up to $1,500 for up to 4 years

More information on page 4

(5)

Federal Programs for Teachers

■ Federal TEACH Grants

up to $4,000 a year for tuition

■ Federal Loan Forgiveness for Teachers

forgives up to $5,000 in federal Stafford loan debt

up to $17,300 for highly qualified math, science or special education teachers

■ Federal Perkins Loan Forgiveness

forgives part or all of a federal Perkins loan

■ Federal Pell Grants

may be used to attend a teacher credential program

■ Teach for America

forbearance and interest payment benefits on qualified student loans

up to $4,725 a year to repay loans

More information on page 4

(6)

Financial aid for specific populations

■ Foster Youth

♦ College-based tuition waivers/scholarships

♦ Orphan Foundation of America

♦ State-administered grant programs

■ Athletes

♦ www.ncaaclearinghouse.net

■ Students with disabilities

♦ www.heath.gwu.edu

■ Students with dependents

■ Military and their dependents

♦ www.gibill.va.gov

More information on page 5

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Work-study or student employment

■ Student employment

♦ Earn money to pay for college

■ Federal Work-Study

♦ Administered through select colleges or your college may have its own program

♦ Receive help getting a part-time job on campus or with a local nonprofit agency

♦ Amount of the award depends on how early you apply, your financial need and the college’s work-study or student

employment funds

♦ www.federalstudentaid.ed.gov

■ Employment related to your studies may be available

■ Visit the career center for help with general employment

More information on page 8

(8)

Other ways to pay for college

■ Private scholarships

■ National Merit Scholarships

■ Community service

■ Enlist in the military

■ Earn credit in high school

■ Cooperative education

■ Start at a community college

■ Credit for experience

■ 529 college savings plan

■ Part-time work

■ Company-paid education

■ Tax benefits

■ Jobs that help you repay your loans

(9)

Federal loans: The smart way to borrow

■ Federal Stafford Loans

♦ Subsidized Stafford Loans

• Based solely on financial need

• Federal government pays the interest while you are in school

♦ Unsubsidized Stafford Loans

• All eligible students can receive them, regardless of income or assets

• You’re responsible for paying the interest while

in school

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A closer look at Stafford loans

■ How to apply:

♦ Submit the FAFSA; later you will be asked to sign a master promissory note

■ Interest rate

♦ Fixed at 6.8 percent for the life of the loan

♦ Subsidized loans for undergraduate study will see a decreasing interest rate until 2012

■ Fees

♦ Origination or default fees up to 1 percent

■ Enrollment at least half time

■ Funds sent directly to your college

■ Repayment begins six months after you graduate

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Federal Stafford loan limits

Year Dependent

Undergraduates

Independent Undergraduates

Graduate and Professional Students

First year $5,500 $9,500 $20,500—no more than

$8,500 in subsidized loans

No more than $3,500 in subsidized loans

Second year $6,500 $10,500

No more than $4,500 may be in subsidized loans Third and beyond

(each year)

$7,500 $12,500

No more than $5,500 in subsidized loans Teacher

certification

$5,500 $12,500—no more than

$5,500 may be in subsidized loans Total amount you

can borrow

$31,000 $57,500

No more than $23,000 may be in subsidized loans $138,500—no more than $65,500 in subsidized loans

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How much can you borrow?

■ It depends on:

♦ your college’s COA

♦ your EFC

♦ your year in school

♦ whether you attend full time or half time

♦ whether you’re a dependent or an independent student, and

♦ how much other financial aid you receive.

■ Your loan and any other financial aid you

receive, including private aid, cannot be

more than your college expenses.

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Accrued interest

■ Capitalization: Adding interest to the amount borrowed rather than repaying it as it accrues

■ Example:

♦ Borrow $10,000 unsubsidized Stafford

♦ Interest is $57 per month

♦ Defer paying interest while in school for four years

♦ $2,720 of interest accrues after 4 years

♦ $12,720 owed when you begin

repayment

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Federal PLUS Loans

■ Enable your parents or stepparents

(whose information is reported on your FAFSA) to borrow up to the total cost of your undergraduate study

♦ Minus any other aid you may receive

♦ Legal guardians cannot borrow PLUS loans for your study

See chart on page 15

(15)

Private loans

■ Often carry higher interest rates and fees than federal loans or home equity loans

■ May have less attractive repayment terms

■ Typically the interest rates are variable

♦ Rates can change month to month

■ Usually based on your credit rating and income-to-debt ratio

♦ NOT based on financial need

■ May require a co-signer

(16)

Applying for Financial Aid

(17)

Applying for financial aid

1. Collect your information

♦ SSN, driver’s license number, e-mail address

♦ Federal Student Aid PIN (www.pin.ed.gov)

• And one of your parents’ PINs

♦ Your financial records

2. Fill out the Free Application for Federal Student Aid (FAFSA) on the Web Worksheet

♦ www.fafsa.ed.gov

3. Complete the FAFSA online

4. Submit any other applications

5. Review your Student Aid Report

6. Evaluate your financial aid offers

(18)

Complete the FAFSA online

■ Easiest and fastest way to complete the FAFSA is online

♦ www.fafsa.ed.gov

■ Read all the instructions

■ Name must match your SSN

■ Keep a copy for your records

■ E-sign your FAFSA using your PIN

♦ Provide an e-mail address to receive an estimate of your EFC instantly

■ Use your PIN to check on the status

(19)

Free help with the FAFSA

■ In person

♦ Your school

♦ College Goal Sunday workshop in January

• www.collegegoalsunday.org for dates and locations

■ Online at www.fafsa.ed.gov

♦ Click on the Live Help button

♦ www.studentaid.ed.gov/completefafsa for help with the paper FAFSA

■ Phone: 800.433.3243

♦ (M-F til 9:00 pm Pacific Time)

(20)

Your financial need

Cost of attendance (COA)

♦ Each college has its own student budget or COA, which includes tuition, fees, books, supplies,

housing, food, transportation and personal expenses

Expected family contribution (EFC)

♦ The amount of money the government believes you or your family could reasonably

■ Your financial need

Your COA

- Your EFC

= Your financial need

(21)

Review your Student Aid Report (SAR)

■ The SAR is a report from the federal

processor summarizing the information you provided on the FAFSA

♦ Receive within 72 hours if you submitted

the FAFSA online (up to 3 weeks for paper)

■ Lists your EFC for the school year

♦ Located at the top of your SAR next to EFC

♦ No dollar sign next to it (e.g., 02500)

(22)

Receiving your financial aid

■ At the beginning of each term

♦ Financial aid goes to your college first for tuition and fees, and room and board

♦ Grants and scholarships may be sent to you or your school

♦ Work-study is paid after you work

■ Reapply each year

♦ Most financial aid awards are considered

“new” each school year, so you’ll need to

submit the FAFSA each year.

(23)

Your rights and responsibilities

Right to ask:

■ Costs and refund policies

■ Percentage of students who complete the

program; percentage of students placed in jobs

■ What financial help is available

■ Them to explain the various elements in your financial aid package

■ And more

Responsibility to:

■ Research the colleges

■ Know and comply with all application deadlines

■ Respond promptly and provide all information

■ Read and keep copies of all forms

■ Complete loan entrance and exit counseling

■ Repay your student loans

■ And more

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Managing Your Money

(25)

Smart money tips

■ Get organized

♦ Set up separate files

♦ Keep them in a safe place

■ Create a monthly spending plan and stick to it

■ Avoid using credit cards

■ Start saving

♦ No matter how little, set aside something

every month

(26)

Know how much you need

■ Expenses during college include more than just tuition and fees

♦ Find out current costs for nearly every college

♦ http://collegenavigator.ed.gov

♦ www.collegeboard.com

■ Shop around for textbooks

♦ Research new and used textbooks

♦ Compare ISBNs

♦ Check into rental or buyback programs

(27)

Protect against identity theft

■ Keep your SSN, DOB, Driver’s license, passwords and PINs confidential

■ Never give out personal or financial information over the phone or via e-mail

■ Be careful sharing personal information

■ Make sure Web sits are secure before providing information

■ Get your free credit report annually

♦ www.annualcreditreport.com

■ Shred all documents

■ Learn more at: www.idtheftcenter.org or www.ftc.gov/idtheft

(28)

Useful Web sites

♦ ACT: www.actstudent.org

♦ AmeriCorps: www.americorps.gov

♦ Cal Grants: www.calgrants.org

♦ College Board: www.collegeboard.com

♦ College Savings Plan: www.scholarshare.com

♦ EdFund: www.edfund.org

♦ FAFSA: www.fafsa.ed.gov

♦ Federal Financial Aid: www.federalstudentaid.ed.gov

(29)

Thank you for attending

© EdFund, 2009. All rights reserved

Cathy Hardy

Director of Financial Aid Services Naugatuck Valley Community

College

References

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