Unit 5: Saving for college
How long is a typical grace period?
6 months
SG: What do you need to fill out and file in order to qualify for financial aid?
FAFSA
How are the FAFSA, SAR, and Financial Aid package connected?
FAFSA --> Fill out, submit, COULD qualify (no money) SAR --> Receive from FAFSA and tells EFC Financial Aid letter ---> comes from separate schools and shows how much school will help
SG: How much more does a college grad make in comparison to a high school graduate over the course of a career?
a lot more!
Promissory note
agreement to repay your loan
What is a federal work study award?
an estimate of how much you are expected to contribute to your college expenses from an on-campus job that you will have while you are a student at that school
When should you submit FAFSA?
as soon as possible
What are some other names a financial aid package may be called?
award letter
SG: How much does it cost to fill out and apply for scholarships?
heck ya it's free
SG H: Describe the impact of interest on a 5 year student loan versus a 15 year loan.
interest rates will be lower for the 5 year student loan
The lower your monthly payment, the ___ you will pay in total interest.
less
What steps should you take if you find any errors in SAR?
log in to fafsa.ed.gov to update that information
Do you HAVE to except ALL financial aid listed in a financial award letter?
no
What month is FAFSA available?
october
Why is it a good idea to make interest payments for those loans that accrue interest during a grace period?
the balance keeps growing
Who uses the FAFSA once you have submitted it?
the schools you list
SG: The ______ - financial air awards = __________
1. cost of attendance 2. net price
Grants are for _____ and must fill out _______
1. income 2. FAFSA
Student loans are for you ______, not your _________
1. student expenses 2. lifestyle
SG: What is the standard repayment plan?
10 years
Federal loans all have ____ amounts of interest
fixed
Federal grant
- free money from college - requites: FAFSA with extra instruction with the TEACH grant
Private grants
- given to you by organizations and companies - fill out: application & FAFSA
Scholarships are for _____ and must fill out _______
1. merit-based 2. application process
SG: Types of aid in order that you should accept them
- grants - scholarships - work study - federal loans - state loans - private loans
Costs associated with cost of attending college
- house/ living - textbooks - tuition - food - sorority
SG: What are some things to do during grace period to make sure your repayment goes smoothly?
- Filing system for loan docs - be organized to keep you onto of obligations`
Grants
- Free money - simple to fill out FAFSA form
Retention rates and their impact on FAFSA
- how long people will stay at school - highlights worth of going to college (the lower = don't want to go)
Types of loans from expensive --> least
1. private loan 2. state loan 3. federal loan
SG H: What can happen if you miss a loan payment for student loans?
- Interest rates increase - late fees - damage credit - loan default
Unsubsidized Direct Loans definition
- Interest starts building up right away. - good idea to at least make interest payments while your still in school
Are loans included in the sticker price? why or why not?
- No - You still have to pay them back
College grant
- Offered by college directly - must fill out FAFSA
What are the two most misleading items on the financial aid package?
- Parent plus loans - work study
SG: What is the difference between a subsidized loan and an unsubsidized loan?
- Subsidized the government pays for interest - unsubsidized you pay for interest
What strategies are helpful when securing a college?
- apply for local scholarships - scholarships with smaller awards - build resume resources - do research and know sources - write essays and forms asap - use internet - build resume
What is SAR?
- basic information about your financial aid eligibility - fafsa.ed.gov - determines your EFC and your eligibility for federal and institutional aid
Some ways you can manage your money when you are in colleg
- budget - only spend what you have - don't waste money on useless items - work - TRACK SPENDING
How can not managing your money in college impact you life after college?
- can cause extra debt you can'y come back from - stress, progressing life
Besides the government, who are two sources you can go to?
- college - organizations/ companies
How to benefit from going to college
- earn higher degree - learn ares of study - more knowledge in field - good on resume - COMPLETION OF COLLEGE SHOWS HARD WORKER
What is EFC?
- estimated amount that your family can contribute toward your education - found: upper right corner of SAR - determines one's financial needs
SG: Tips of being a responsible borrower
- except loans you only need - research - make sure school is right for you (idea of future income) - school location
SG H: What are some advantages of federal student loans?
- fixed interest - comes from governemnt
Graduated Repayment Income
- for those expecting to move up in career - in come driven
Scholarships
- free money - must research and stand out
Overtime students graduating with loan debt has been ________ due to _____________
- increasing - inflation - laziness - more kids attending - TUITION COSTS INCREASING
Why do some people not fill out FAFSA?
- laziness - don't know about it - not going to college - gap year (SHOULD STILL FILL OUT) - misconceptions
Where are some places you should look for scholarships?
- local businesses - local communities
What advice would you gvie to someone recycling essays to apply for other scholarships?
- make sure to reuse - tweek it a bit based on scholarship you're applying for
Loans
- must pay back - earn interest - lots of student debt
Direct plus loans definition
- offered to graduated and professional students and parents of undergrads - like unsubsidized loan
Three types of federal loans
- subsidized direct loans - unsubsidized direct loans - direct loans plus
loan default rate
- the rate at which the majority of students are paying back loans - low means good because majority of students are able to find decent jobs after graduating college
What types of aid do you not have to payback?
- university grant - work study - scholarship - gift
SG: What type of information might you need to fill out the FAFSA?
- your taxes - your parents taxes - W-2 forms - bank and investment statements - social security # - drivers licenses - proof of permanent residency
SG: What are 3 big differences between a federal loan and a private loan?
1. Interest rates (private is higher) 2. repayment doesn't occur while in college (many private loans require you to do so) 3. may be eligible for loan forgiveness (not private)
loan consolidation
Combining many loans into one large loan with one monthly payment.
SG H: What should you do if your financial aid package/award letter is missing information?
Contact the financial aid office with your updated information
How does repayment effect different types of people?
Depending on relationship status and job type, it may take longer or shorter to pay off depending on the person's salary
DRN stands for
Digital registration number
What does FAFSA stand for?
Free Application for Federal Student Aid
DRN
ID number for FAFSA
SG: How much does it cost to fill out the FAFSA?
It's free :)
Should you always choose the school with lower sticker price? why or why not?
No because schools can offer different financial aid packages
SG: Do you need a certain income level to apply for grants/ scholarships?
No, anyone can. Even the rich can.
When applying for FAFSA, do your assets put away penalize you?
Nope!
What do you receive after you submit the FAFSA?
Student Aid Report (SAR)
Why can you borrow less as a freshman and then more as sophomore and beyond?
There's an aggregate limit, sometimes called a cumulative limit, specifies the total amount you are allowed to borrow during your academic career.
Why should you accept scholarships and grants first?
They are free money which you don't have to repay
Financial Aid Award Letter
This is a document sent to admitted students describing the terms of the financial aid that the college is offering them, including the types and amounts of aid offered, the conditions that govern the awards, and a deadline for accepting the awards.
What is loan default?
When you have to pay your whole loan at once with added interest
SG: Rule of thumb
Your total student loan debt should not exceed your expected first year salary after graduating college
Loan servicer
a company that handles the billing and other services on your loan
Having unlimited amounts of money (credit) influences people to...
buy large items
Sticker price
cost of attendance
graduation rate effect
describes the likelihood of her dropping out or not. This will show her the worth of the amount of money she's pulling out
Subsidized loan definiton
federal government pays the interest on your loan while your still in school at least half time
What information should you NEVER provide for a scholarship or grant application?
financial info (bank, credit/ debit card info, etc.)
Loan Refinancing
replaces your separate loans with a new loan and interest rates
SG: Standard 10 year repayment plan
shortest, least expensive
Most popular loan
subsidized direct loan
Signing a promissory note significance
the acceptance to terms and conditions of the loan
Fixed interest meanign
the amount of interest you have to pay stays the same until you pay off loan
When applying for FAFSA, you will need tax forms from how many years ago?
two
How many times can you file for a FAFSA?
up to 12 terms
