paying for college - acc spring 2012

aplusfcu.org 800-252-8148Federal Credit Union

Federal Credit Union

Paying for CollegeKelsey BalcaitisMarch 21, 2012


COLLEGE COSTS:The Good, The Bad, The Ugly


THE UGLY


Tuition+ Fees

+ Housing+ Food+ Books

+ Transportation+ Miscellaneous

Cost of College

Cost of College


Cost of College, 2011-12

SOURCE: The College Board, Trends in College Pricing 2011, Figure 1.


In-State 4 Yr. Public

Out-of-State 4 Yr. Public

4 Yr. Private Public 2 Yr.

Published Tuition and Fees

$8,244 $20,770 $28,500 $2,963

Change from 2010-2011

8.3% 5.7% 4.5% 8.7%

Average Total Charges*

$17,131 $29,657 $38,589 NA

Change from 2010-2011

6.0% 5.2% 4.4% NA

2011-2012 College Costs

* Includes tuition, fees, room and board Source: College Board, Trends in College Pricing 2011


Graduating and In Debt

Avg. student loan debt is on the rise

2004:$18,650

2008: $23,200

2010: $25,250

And don’t forget: $3,200 in credit card debt!


THE BAD


Little Glimmers

• Between 2005-06 and 2010-11, federal grant aid to undergrad and grad students increased by 141%

• Between 2005-06 and 2010-11, savings to taxpayers through federal tax credits and deductions for education increased by 108%


Little Glimmers

• In 2010-2011, $227.2 billion in financial aid was distributed to undergrad and graduate students in the form of grants, Federal Work-Study, federal loans, and federal tax credits and deductions.

• In 2010-2011, students borrowed around $7.9 billion in loans from state and private sources.


Little Glimmers

• Average net tuition and fees for in-state students only increased by about $170 in 2011 dollars

Published Tuition

Grant aid, federal

education tax credits

Net Tuition


Little Glimmers

SOURCE: The College Board, Trends in College Pricing 2011, Figure 7.


THE GOOD


Is it even worth it?

Yes.


Is it even worth it?Earn

ing

s

Rati

oLifetime Earnings Relative to High School

Graduates

Source: Education Pays 2010, College Board


Is it even worth it?

• In 2008, median family income: • Bachelor’s degree $101,099• High School diploma $49,414

• Non-financial benefits• Better health and quality of life• Access to employer paid benefits


SHOW ME THE MONEY


No Right WaySource: How America Pays for

College 2011, Sallie Mae


FINANCIAL AID


Federal Student Aid

• Money from the Federal Government to help pay for a postsecondary education

• Covers expenses such as tuition and fees, room and board, books and supplies, and transportation

• Three main categories:• Grants• Work-study• Loans


Other Financial Aid

• Can get money from other sources:• State grants• Institutional grants• Scholarships• Private loans


FAFSA


FAFSA?

• FREE Application for Federal Student Aid

• Online and paper versions

fafsa.ed.gov

http://www.fafsa.ed.gov/


Why FAFSA?

• Only way to receive federal financial aid• Federal Stafford Loans • Grants• Work-study

• Collects information about the student and his/her family to determine need


FAFSA Timeline

• Begin anytime after January 1st of the student’s senior year and while in college

• Need to complete before colleges’ deadlines


What Students Will Need

• Social Security Number or Alien Registration Number

• Driver’s License or equivalent• Prior year’s Federal Tax returns*• Prior year’s untaxed income records*• Prior year’s bank statements*• Prior year’s business and investments records*• Federal Student Aid PIN*

• pin.ed.gov

*for students and parents


Financial Aid Process

1. Complete the FAFSA after January 1. • Check school specific deadlines• Fill out as soon as possible!

2. Review the Student Aid Report (SAR).• Includes your Expected Family Contribution

(EFC)

3. Review award letters.


EFC

Expected Family Contribution

Cost of Attendance- Expected Financial Contribution

Financial Need


TYPES OF AID


Recent Changes

• Student lending changes• Passed with the Health Care Bill in

March 2010• Eliminates the “Middle Man”

• Borrow directly from the Federal Government

• Increases Federal Grant Money


Types of Aid

Financial Aid

Package

Borrowed

Money

Gift Money

Earned Money


Borrowed Money

• Loans• Subsidized• Unsubsidized• PLUS• Perkins


Private Loans

Pros

• Can give a student additional money if needed

Cons

• Cannot consolidate with federal loans

• Not backed by government

• Potentially higher interest rate


Grants

• Tax free cash award • Need based• Does not need to be paid back• Various sources including Federal

and State governments, or institution


Grants

1. Federal Pell Grant2. Federal Supplemental Education

Opportunity Grant (FSEOG)3. Teacher Education Assistance for

College and Higher Education (TEACH)

4. Iraq and Afghanistan Service Grant


Merit Based Aid

• Scholarships• Sources:

• Schools• Employers• Activities/Clubs• Location• Others


Scholarships

Each year, we award nine $1,000 scholarships to high school and college students.

Application period is Dec 2011 – Feb 2012


Work Study

• Jobs usually on campus • Minimum wage• Jobs in student’s field

of study• Getting a job is not

guaranteed, still need to apply


American Opportunity Tax Credit

• Expands the Hope Credit• Extended until December 31, 2012• Four years of post-secondary expenses• Covers Qualified Tuition and Related Expenses

• Includes course materials: books, supplies, and equipment needed for a course of study

• Do not have to purchase these from the institution

• Up to $2,500 (40% of the credit is refundable, up to $1,000)


Other Tax Benefits

• Lifetime Learning Credit• Tuition and Fees Tax Deduction• Student Loan Interest • Learn more:

• http://www.irs.gov/pub/irs-pdf/p970.pdf

http://www.irs.gov/pub/irs-pdf/p970.pdf


DURING SCHOOL


Keeping Your Aid

Satisfactory Academic Progress• Required to keep financial aid• Elements:

• GPA Requirement • ACC: 2.0 cumulative

• Completion Rate Requirement • ACC: must complete 67% of all hours

attempted• Maximum Time Frame

• ACC: 150% of the published length of the academic program enrolled in Source: ACC Financial Aid


AFTER GRADUATION


Your Rights and Responsibilities

Your Rights• Details of your loan• Grace period• Loan repayment

schedule• Change in loan

servicers

Your Responsibilities • Sign a promissory

note• Make payments on

time• Continue to pay while

waiting for forbearance or deferment approval

• Receive entrance and exit counseling


It’s Time to Pay

• Grace Period:• Time between graduation, dropping below half-

time, or leaving school and when you need to begin paying back your loan

• Direct Stafford Loans: 6 months• Perkins Loans: 9 months • PLUS Loans: no grace period • Called to active military duty for >30 days:

grace period is delayed


Repayment Options

• Standard• Graduated• Extended• Income-Sensitive • Income-Contingent• Income-Based

From: http://pythagoreanism.com/debt-downgrade-student-loan-bubble/

http://pythagoreanism.com/debt-downgrade-student-loan-bubble/




Consolidation

Combine multiple federal student loans to a new

Consolidation Loan with one monthly payment.


Pros and Cons

PROS• One monthly payment• Lower monthly

payment

CONS• Increase length of

repayment• Increase amount paid

in interest• May lose loan specific

benefits


Should You?

1. List your current student loans, include balance, interest rate, and monthly payment.

2. Total your monthly payments. 3. Look at your budget. Can you afford all

your payments? 4. Use the online consolidation calculator to

see the benefit of consolidation. loanconsolidation.ed.gov


Trouble Paying

• Deferment• Temporary suspension of loan payments for

specific situations• Ex: reenrollment in school, unemployment, or

economic hardship

• Forbearance• Temporary postponement or reduction of

payments for a period of time because of financial difficulty

• Interest accrues no matter what type of loan


QUESTIONS?Kelsey Balcaitis

[email protected]/aplusfcu

mailto:[email protected]

paying for college - acc spring 2012

Education

federal credit union800

orgfederal credit union

federal credit unionpaying

federal workstudy

federal loans

federal government

federal grantaid

federal grant moneyaplusfcu