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