Funding Your Funding Your College Education:College Education:

What are you getting yourself into?What are you getting yourself into?

Rossford Guidance OfficeRossford Guidance OfficeDan Saygers, CounselorDan Saygers, Counselor

Funding your college Funding your college educationeducation Congratulations on getting into a Congratulations on getting into a

collegecollege Common questions:Common questions:

Can I afford to go?Can I afford to go? I received my letter(s) telling me how I received my letter(s) telling me how

much it will cost, but I’m not sure what it much it will cost, but I’m not sure what it means?means?

I don’t think I can pay for all of this?I don’t think I can pay for all of this? I’m going to let my parents deal with I’m going to let my parents deal with

this!this!

Funding your college Funding your college educationeducation Understanding your award Understanding your award

statement from the Financial Aid statement from the Financial Aid OfficeOffice Everything should be clearly Everything should be clearly

marked as a scholarship, grant or marked as a scholarship, grant or loanloan

The entire cost of attending, The entire cost of attending, including tuition, room/board, and including tuition, room/board, and other expenses should be listedother expenses should be listed

Even fees for processing loans are Even fees for processing loans are listed listed

Scholarships, grantsScholarships, grants

Sources of money that you don’t Sources of money that you don’t have to pay back!!!!have to pay back!!!!

Often, scholarships just take the Often, scholarships just take the place of grantsplace of grants

Some may be single-year awards, Some may be single-year awards, others may be renewable, but you others may be renewable, but you may have to meet gpa requirements may have to meet gpa requirements – make sure you understand what – make sure you understand what these are!these are!

Student LoansStudent Loans

Student loans are in your nameStudent loans are in your name You have to pay them backYou have to pay them back They stick to you better than glueThey stick to you better than glue The Fed Gov will withhold your income The Fed Gov will withhold your income

tax refund if you aren’t paying back your tax refund if you aren’t paying back your student loansstudent loans

Some loans are better than othersSome loans are better than others Avoid student loans if you can, but they Avoid student loans if you can, but they

are an important part of most student’s are an important part of most student’s planplan

Types of Student LoansTypes of Student Loans

Federal Student LoansFederal Student Loans College-Based LoansCollege-Based Loans

Alternative LoansAlternative Loans

There are big differences There are big differences between these. Some are good, between these. Some are good, some not so good!some not so good!

Some important pointsSome important points

All student loans involve All student loans involve interestinterest, a monthly fee based on , a monthly fee based on the principal amount of the loanthe principal amount of the loan Some loans are Some loans are subsidizedsubsidized, others , others

are not (more later)are not (more later) Interest rates can vary widely Interest rates can vary widely

based on the type of loanbased on the type of loan Terms of repayment also varyTerms of repayment also vary

Sub or Unsub?Sub or Unsub?

Subsidized loans don’t accrue Subsidized loans don’t accrue interest until you stop taking classes interest until you stop taking classes (hopefully after you graduate)(hopefully after you graduate) Actually the Gov pays for the interestActually the Gov pays for the interest

Unsubsidized loans start accruing Unsubsidized loans start accruing interest as soon they are dispersedinterest as soon they are dispersed

What does this mean?What does this mean? We’ll check this out in a minuteWe’ll check this out in a minute

Student LoansStudent Loans BestBest

Federal Perkins LoansFederal Perkins Loans Always subsidizedAlways subsidized Lowest interest rate: 5.0% Lowest interest rate: 5.0% You can borrow up to $4000/year, but You can borrow up to $4000/year, but

that is the maximum and probably not that is the maximum and probably not likelylikely

9 month grace period before repayment 9 month grace period before repayment must begin, but this can be deferred if must begin, but this can be deferred if you go back to schoolyou go back to school

Qualification based on FAFSAQualification based on FAFSA

Student LoansStudent LoansReally Good (sub) or Good (unsub)Really Good (sub) or Good (unsub)

Federal Stafford LoansFederal Stafford Loans Subsidized or UnsubsidizedSubsidized or Unsubsidized Interest rate: 6% sub and 6.8% unsub, Interest rate: 6% sub and 6.8% unsub,

but changes from year to yearbut changes from year to year 6 month grace period before repayment 6 month grace period before repayment

must begin, but this can be deferred if must begin, but this can be deferred if you go back to school (unsub keeps you go back to school (unsub keeps accruing int)accruing int)

11stst year 3500, 2 year 3500, 2ndnd year 4500, 3 year 4500, 3rdrd/4/4thth 5500 5500

Student LoansStudent LoansOnly if you really have toOnly if you really have to

College-based loansCollege-based loans Terms are set by the college and Terms are set by the college and

so they can varyso they can vary Probably not subsidizedProbably not subsidized Interest rates probably better than Interest rates probably better than

alternative loansalternative loans

Student LoansStudent LoansOnly if you are desperateOnly if you are desperate

Alternative loansAlternative loans Offered by banks, lending institutionsOffered by banks, lending institutions Interests rates can be very highInterests rates can be very high Interest begins accruing immediatelyInterest begins accruing immediately Some students will take these out Some students will take these out

even if they already have other even if they already have other student loansstudent loans

Danger – back away from the loan Danger – back away from the loan agreementagreement

Parent LoansParent LoansGood for you, but not for Mom and DadGood for you, but not for Mom and Dad

Federal Parent PLUS LoansFederal Parent PLUS Loans Parents can borrow up to the full cost of Parents can borrow up to the full cost of

attendanceattendance 8.5% interest rate8.5% interest rate Starts accruing interest immediatelyStarts accruing interest immediately Repayment starts 60 days after Repayment starts 60 days after

dispersementdispersement These are probably the best loans your These are probably the best loans your

parents will be able to get to pay for you parents will be able to get to pay for you to go to collegeto go to college

Check this outCheck this out

Loan calculatorLoan calculator http://www.accessgroup.org loan chttp://www.accessgroup.org loan c

alculatoralculator

The fine printThe fine print Loan origination feesLoan origination fees

Every time you get a loan (each Every time you get a loan (each year) there will be a fee taken out, year) there will be a fee taken out, which means you don’t get the full which means you don’t get the full amountamount

Most students end up borrowing Most students end up borrowing more in their 3more in their 3rdrd and 4 and 4thth years years Grants may not be offered like they Grants may not be offered like they

were at firstwere at first Especially in your 4Especially in your 4thth year, they know year, they know

you’re more likely to keep paying so you’re more likely to keep paying so that you can graduatethat you can graduate

More fine printMore fine print

You can’t get Fed Student loans You can’t get Fed Student loans without filing a FAFSAwithout filing a FAFSA

The average student debt in The average student debt in Ohio last year was $19,000Ohio last year was $19,000

Student loans have a 10 year Student loans have a 10 year repayment schedule which repayment schedule which starts as soon as you stop starts as soon as you stop attendingattending

So what does this mean, So what does this mean, anyways?anyways?

Read your financial award Read your financial award statement carefullystatement carefully

Don’t take any loans unless you Don’t take any loans unless you really have toreally have to

Some college majors may be a Some college majors may be a better risk for taking on debtbetter risk for taking on debt

How else can you get into How else can you get into trouble?trouble? Credit cardsCredit cards

College students are targetsCollege students are targets Flunking outFlunking out

You may have big student loan debts You may have big student loan debts and nothing to show for itand nothing to show for it

Don’t go to college for the partiesDon’t go to college for the parties College is too expensive to waste it College is too expensive to waste it

partying partying