Financing College

Financing College What Students Need to Know Presented by: Carolyn E. Karno, Manager, Early Awareness and College Planning The Connecticut Student Loan Foundation Will the Economic Downturn Impact You? Impacts: • Tipping Point – “The level at which the momentum for changes becomes unstoppable”” • Malcolm Gladwell Tighter credit Fewer lenders Severe losses in investments Job cuts • Our economy has reached its tipping point The Connecticut Student Loan Foundation Be a Smart Consumer View college as an investment  Limit your college debt  There is more than one right school  Know the facts  Develop a plan Always have a Plan “B” The Connecticut Student Loan Foundation College Costs • This year, annual college tuition and fees in Connecticut range from approximately $2,900 to more than $35,000 • Additional expenses include: – Room and board – Books – Transportation – Personal expenses The Connecticut Student Loan Foundation Meet LM • He plans to become a doctor • He intends to leave Connecticut • His top two schools are Johns Hopkins and Saint John’s • He does not apply to any public school • He lives with a single parent who earns less than $40,000 per year The Connecticut Student Loan Foundation March 2008 • LM is denied admission at Hopkins • He is accepted into Saint John’s – Cost of attendance = $40,610 – He sends in his deposit • No plan for paying for it The Connecticut Student Loan Foundation April 2008 • LM receives an award letter • He receives about $27,000 in aid – Includes grants – Scholarships – loans • He needs an additional $14,500 • Mother does not have the The Connecticut money Student Loan Foundation Time is running out Wise Investment? • How much debt is too much? • LM would owe at least $43,000 in federal loans • He would also need to borrow $60,000 from private loans • Is this an affordable option? • How would he be able to afford medical school? The Connecticut Student Loan Foundation Know The Facts About Financial Aid $97.1 Billion in Aid for Undergraduates Does not include private/state education loans estimated at $19 Billion – about 29% of loans taken out by undergraduates Source: Trends in Student Aid 2007, The College Board The Connecticut Student Loan Foundation Free Money • Grants – Based on financial need – Federal grants include: • The Pell Grant – Academic Competitiveness Grant – Smart Grant • Supplemental Educational Opportunity Grant – State Grants • CT Independent College State Grant Program • CT Aid for Public Schools – Institutional Grants The Connecticut Student Loan Foundation Students must complete a FAFSA to be eligible for federal or state financial aid Free Money • Scholarships – Often referred to as Merit Aid – Based on talent or special ability Institutional Scholarships – Some colleges provide merit based aid • Local and Community Scholarships – Check with the guidance office, chamber of commerce, civic organizations, churches, union The Connecticut Student Loan Foundation Student Loans Federal Stafford Loans Base Limits Subsidized Freshman $3,500 Additional Unsubsidized $2,000 Subsidized Unsubsidized Must complete a FAFSA to be Eligible Sophomore Junior Senior $4,500 $5,500 $5,500 $2,000 $2,000 $2,000 No co-signer The Connecticut Student Loan Foundation Student Loans • Private or Alternative Loans • Fewer lenders offer these loans – Most will be a variable rate – Most will require a co-signer with an excellent credit rating – Some will require the interest be paid while the student is in school – Repayment terms vary between The10 – 25 years Loan Foundation Connecticut Student Other Types of Financial Aid • Federal Work-Study – Must complete the Free Application for Federal Student Aid (FAFSA) to be eligible The Connecticut Student Loan Foundation Know The Facts • Speak with your parent(s) or guardian(s) to find out how much they are willing to contribute towards your education • All students should apply to at least two “financially safe” schools The Connecticut Student Loan Foundation Financial Aid Forms • All college-bound students should complete the FAFSA www.fafsa.ed.gov • Can complete after January 1st of your senior year • Private colleges may require an additional The Connecticut Student Loan Foundation form After You Submit the FAFSA • Each college listed will receive an institutional report – Used to determine your financial aid award • You will receive a Student Aid Report (SAR) – The report lists your Expected Family Contribution (EFC) – It will also note if you are eligible for a federal Pell Grant The Connecticut Student Loan Foundation Words to Remember • Know that a better predictor of future success is not where you go to college but what you do at the college you attend. The Connecticut Student Loan Foundation Student Award Letter The Connecticut Student Loan Foundation Special Circumstances • You have the right to appeal your financial aid award – If you feel you have special circumstances, contact the financial aid officer at the college you expect to attend and ask about the appeal process The Connecticut Student Loan Foundation Did the School Meet Your Full Need? Some schools Gap School “A” $28,000 GAP $10,500 School “B” $18,000 Loans $3,500 Grants and Scholarships $8,000 EFC $6,000 Loans $5,000 Grants and Scholarships $7,000 EFC $6,000 The Connecticut Student Loan Foundation How Much Debt is Too Much? • Students should not borrow more than 10% of their projected monthly income • Some lenders recommend that students should not borrow more than their projected first year salary • www.mappingyourfuture.org/paying/debtwizard / The Connecticut Student Loan Foundation Ways to Cut Costs • • • • • • • • • Community College & transfer State colleges and universities Live at home New England Regional Program AP or other college courses in high school for college credit Apply for private scholarships Apply for campus employment Consider southern or mid-western colleges Try to graduate in four years The Connecticut Student Loan Foundation Financial Aid Timeline • September/October/Novemb er – Find out which forms each college requires – Check Deadlines – Explore scholarship opportunities • December – Register for a PIN – Gather financial documents – Complete PROFILE (if required) The Connecticut Student Loan Foundation Financial Aid Timeline • January – Complete FAFSA – Complete scholarship applications – Update and make corrections to completed FAFSA – Compare award letters – Contact FA office with questions • February • March/April • May – Sign all documents and send college your deposit The Connecticut Student Loan Foundation Online Resources • • • • • • • • • • • www.mappingyourfuture.org www.campusexplorer.com www.collegeboard.com www.ucan-network.org http://nces.ed.gov/collegenavigator www.projectonstudentdebt.org http://www.usnews.com/sections/busine ss/paying-for-college-forstudents/index.html www.cslf.com www.studentaid.ed.gov www.brokescholar.com www.gocollege.com Foundation The Connecticut Student Loan About CSLF • Training and Early Awareness Department • Free Services – College Planning Services – Financial Aid Assistance – Assistance with Aid Applications – One-on-One Advising – Workshops and Professional Development Programs Resource Center, Rocky Hill, Connecticut Toll Free Number 1-800-237-9721 ext 550 Visit our website @ www.cslf.com Email: ckarno@mail.cslf.org The Connecticut Student Loan Foundation College is an Investment in Your Future • Good Luck! The Connecticut Student Loan Foundation