Planning for CollegeMerle LeeManager

Davis High School

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Today’s goals

Investing in yourself Choosing a college More education = more job

options The money you will need and

where to find it Your financial aid journey in

five steps How much do you need to

borrow?

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Invest in Yourself

Education beyond high school can give you skills that you’ll use for the rest of your life, no matter where you live or what job you do

More education may also help you earn a lot more money

Think of education beyond high school as an investment in you

A four-year degree might not be right for everyone; a community or junior college, trade school or technical training are other options to consider

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Choosing a CollegeWhen deciding on a school, think about what you want from your college experience and do good research to learn all you can about your prospective schools.

Consider:

Type of school

Size of school

Location

Academic programs

Activities

Financial aid

Tip!If one school costs more than another, it doesn’t guarantee that the quality of education will be better. Consider other factors, such as the school’s academic strength in your areas of interest.

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How Much More Does Education Pay?Amount of Education Pretax Earnings

Professional degree $100,000

Doctoral degree $79,400

Master’s degree $61,300

Bachelor’s degree $50,900

Associate degree $40,600

Some college, no degree $37,100

High school graduate $31,500

Not a high school graduate $23,400

Key Points:.• Someone with a high school diploma earns almost 35% more money than aperson without one.• Someone with an associate degree earns almost 30% more money than a highschool graduate.• Someone with a master’s degree earns almost double the money of a highschool graduate.• Someone with a professional degree earns almost double the money of someone with a bachelor’s degree.

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The Annual Price of Education

In-State Tuition, Fees, Room & Board and Books

Tuition Only

University of Utah $21,216 $7,139

Utah State University $17,430 $5,940

Westminster $40,500 $28,210

BYU – Provo $17,530 $4,710

Southern Utah University $14,694 $5,576

Dixie State $18,129 $4,089

Weber State $16,968 $4,310

College of Eastern Utah $7,980 $2,472

Utah Valley University $17,486 $4,786

Sources: Tuition, Fees, Room & Board and Books where gathered from the Net Price Calculators on each higher education website.

What are my family’s options? There are many options that families use to pay for college expenses.

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Income

Savings

Financial aid

Tuition payment plan*

529 Plans

Federal student loans

Private student loans

Investments

Home equity

Lines of credit

What’s the best option? The best choice is different for every family and

individual situation. What’s right for you doesn’t have to be just

one option— a combination of aid, savings, loans and income might be the right choice.

Some things to consider: – What’s your financial situation today?

– Will the amount in savings or your 529 plan cover the entire cost, or will you need more?

– How much of the cost do you want to cover, and how much do you expect your parents to pay for?

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How does financial aid fit in? Many times,

financial aid is a lower-cost option for families.

Start with a visit to the school’s financial aid office. They’re the first source for information on grants, scholarships and aid.

It’s the focus of their office to ensure that your family can pay for school.

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Financial aid myths

Only students with a perfect grade point average get aid.

If your family has a decent income, you won’t qualify for anything.

Only great athletes get grants and scholarships.

There’s so much paperwork involved, it’s not worth the time and effort.

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Financial aid facts

Financial aid is money that:

Can come in the form of grants or scholarships that don’t have to be paid back

Could include a Work Study program

Is offered as loans, even to families that have middle to high income

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Getting started

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First things firstComplete the Free Application for Federal Student Aid (FAFSA) with your parents. Most undergraduates need their parents’ information to complete the form. Required in order to qualify for federal aid Complete this as early as possible after your taxes are complete. The results are automatically sent to the schools that you indicate. Be sure to get a PIN before you start—one for your child and one for you—it’s an identification method and can be obtained at pin.ed.gov. Find the form at fafsa.ed.gov.

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Note: Check with the financial aid office for additional forms or applications that you and/or your child may need to complete.

The FAFSA online

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Types of aid

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Don’t have to be repaid

Beware of scams—you should never have to pay to do a scholarship search. Find details on finaid.org and fastweb.com

Awarded based on financial need and/or academic achievement

Don’t have to be repaid

Some are federally funded and others are state programs

Some institutions have their own private grant programs

Based on financial need

Allows students to earn income working part-time

Can work either on or off-campus

Scholarships Grants The Federal Work-Study Program

What federal loans are available?

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Need-based Low interest rates

Fixed interest rates

Government guaranteed

Qualify for unsubsidized regardless of family income

Fixed interest rates

Cover the cost of education

Not need-based

Federal Perkins Loans

Federal subsidized and unsubsidized loans

Direct PLUS Loan for parents and graduate students

Federal Direct Loans

How much will college cost?

When planning how much to borrow, consider the following costs:– Tuition & fees: varies by school

– Housing: dorm room or rent

– Meals: cafeteria or groceries

– Books and supplies: buy used textbooks to save

– Transportation: the bus or parking pass and gas (Student loans cannot be used for the purchase of a car)

– Personal expenses: laundry, toiletries, cell bills, etc.

Consider inflation on tuition and living expenses when calculating the full cost of education.

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Estimate before borrowing

If your parents decide to borrow for your benefit or if you are borrowing on their own, you’ll want to consider repayment.

No one wants a surprise from that first billing statement. – Use an online loan calculator to see how much the monthly

payments will be

– Pay attention if a loan has deferred payments. What is borrowed now may accrue interest while you are in school; interest is normally capitalized (added to the balance) at repayment.

– If you can afford to, paying the interest or even part of the principal balance while you are in school is a great way to reduce your debt load.

Be realistic—consider your estimated income versus your estimated monthly payments. Ideally, student loan payments should be 10 percent or less of net monthly income.

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Timeline

As soon as possible after January 1, file the Free Application for Federal Student Aid (FAFSA) at fafsa.ed.gov (don’t forget to get a PIN).

Register for advanced placement tests.

Complete scholarship applications.

Watch for the Student Aid Report (the response from the FAFSA application).

January February March

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Timeline

Compare financial aid awards

Look for additional funding if aid doesn’t cover the cost

Make sure your final transcripts are sent to the school that you will attend

If you have a summer job, save money!

April May Summer

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What if financial aid isn’t enough?

Private student loans When federal funding and other sources of aid

aren’t enough, you may want to consider a private student loan.

Private loans vary by lender, but they typically offer: – Credit based approvals

– Variable interest rates

– Generous borrowing limits

– Deferred repayment

21Note that most students will need a qualified cosigner to qualify for a private student loan.

More information for students and parents

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Covers the basics of good money management and the skills you need to create a brighter financial future

handsonbanking.org

Hands on Banking®

Any questions?

Thanks for your time today. Merle Lee

More information: studentaid.ed.govfafsa.ed.govanycollege.comcollegenet.comfastweb.com

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