Understanding Your Financial Aid Award Letter

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Financial Aid Award Letters After the Award Agenda Financial Aid Review Financial Aid Award Letters After the Award Agenda Title

Financial Aid Review Title

Cost of Attendance (COA) Financial Aid Formula 7 Cost of Attendance (COA) – Expected Family Contribution (EFC) = Financial Aid Eligibility

Cost of Attendance (COA) (The Whole Kit & Caboodle) Direct Costs (AKA “The BILL”) Fees Room & board Tuition You will be BILLED for Tuition/Fees and Room and Board if you live on campus. This is what is known as a TERM Bill. A school cannot bill you for the other “Stuff” – fast food, laundry, phone calls, school supplies, dorm decorations, etc. However, you will need to purchase or acquire many of these items. So the total cost for a student to attend a college for one year will include what is on the bill, PLUS whatever extras (necessity or luxury) you need to purchase. For those looking to cut costs, the extras are where you can save some money. Think about buying dorm decorations and other supplies from a thrift store or dollar store. Stock up on snacks from COSTCO to bring with you so you don’t’ have to spend a fortune at the vending machine. Also, ask your school if there are lower-cost residence halls or meal options available. + Indirect Costs (Everything Else)

COA-EFC = Financial Aid Need Some more key terms Expected Family Contribution (EFC) Determines how much need-based aid you are eligible to receive. NOT necessarily the amount you will pay! COA-EFC = Financial Aid Need ASA College Planning Center

Net Price vs. Sticker Price Each school has a price tag, but few will pay that price You won’t know how much each school will cost for YOU until after you apply Sticker Price Gift Aid Net Price ASA College Planning Center

Grants Scholarships Types of Free Aid Federal, State, Institutional Usually based on a student’s need Scholarships Primarily Institutional* Usually based on an achievement or special characteristic ASA College Planning Center

Loans Employment Types of Non-Free Aid Direct Loans Direct Subsidized – 3.76% interest rate $3500, $4500, $5500, $5500 Direct Unsubsidized – 3.76% interest rate $2000 per year (dependent) $6000 per year (independent) PLUS Loan – 6.31% interest rate (7.29% APR) Parent Loan up to COA Employment Federal Work-Study (FWS) Work on Campus, earn $$ Does NOT come off your bill ASA College Planning Center

Financial Aid Award Letters Title

This is all you need to know ASA College Planning Center

How Financial Aid Works Compare the financial aid award letters from multiple schools based on: Cost of attendance Amount and types of aid awarded Amount you are expected to pay toward the costs The total to be paid by you Follow the instructions on the financial aid award letter to accept the financial aid package. Be aware of the school’s deadline. Be aware of additional steps that may be required depending on the types of aid you accept. How to Plan for College

EFC = $2000 President’s Presentation Title

How Financial Aid Works At SALT University… $69,474 (COA) - $2,000 (EFC) _____________________________ = $67,474 (Financial Aid Need) If SALT University has given you $66,472 WHAT IS YOUR BALANCE? How to Plan for College

How Financial Aid Works The balance: is $5,002 $3,002 (Balance after award from SALT university’s financial aid award) + $2,002 (EFC) __________________________________ = $5,002 How to Plan for College

EFC = $2000 Presentation Title

How Financial Aid Works Congratulations on being accepted to SALT University! After a careful review of your 2016-17 financial aid application, we are pleased to offer you the following financial aid award: (Your EFC = $8,225) Real cost paid may differ Not all Awards are created equal Parent PLUS Loan How to Plan for College

These Amounts Vary at each school! Unmet Need $37,750 Federal Work-Study $3,500 Student Loan $5,500 These Amounts Vary at each school! Grant $13,500 Colleges use the EFC to determine eligibility for financial aid, then try to meet the eligibility (or fill the barrel) with financial aid from all resources Most colleges are not going to be able to fill the barrel The EFC always goes into the barrel first Unmet need is more common than not Explain what happens to EFC when there is unmet need. In this example, if the student decides to attend this institution, the family will need to contribute the EFC plus unmet need ($5000 + $3000 = $8000) for the student to attend Use this as an example to demonstrate how the EFC is often the MINIMUM contribution for a family, not necessarily a MAXIMUM Explain the difference between direct and indirect costs in the COA and that even though the college won’t bill the student for indirect costs, the family still needs to determine how they will be met Explain ways that students can reduce indirect costs, such as used books and cheaper travel Explain how outside scholarships may affect the financial aid The $5,500 student loan might actually be $5,500 of Direct Loans, which will include at least $2,000 in Unsubsidized Loans. Unsubsidized Loans don’t technically fill in financial need, though when students don’t have their entire financial need met with other aid, the Unsubsidized Loan does help to fill that need Scholarship $9,500 EFC $3,000

Interactive College Cost Calculator (Courtesy of MEFA): Compare! Interactive College Cost Calculator (Courtesy of MEFA): http://www.mefa.org/mefa.aspx?id=2704 ASA College Planning Center

Loan Info Presentation Title

The Benefits of Federal Loans Positives The Benefits of Federal Loans No credit check Annual limits 3.76% fixed interest rate for 2016-17 (Undergrad) 5.31% fixed interest rate for 2016-17 (Graduate) Repayment, Deferment and Forbearance Options Build good credit with timely payments

Federal Student Loans for Undergraduates Federal Government The lender Loan Servicer Will be assigned to the student Student YOU! This is the basic principle for a Direct Loan. Student is sole borrower. Usually known as the “Direct Stafford Loan” Parents can apply separately for their own loan, if needed, called the Parent PLUS loan. How to Plan for College

Federal Student Loans for Undergraduates Student is the sole borrower No credit check Annual limits, $5,500 for a 1st year dependent student. 3.76 % fixed interest rate for 2016-2017 Repayment, Deferment and Forbearance Options after 6-month grace period. Parents can also borrow Federal Loans, (Parent PLUS Loans) must apply separately. 6.31% interest. How to Plan for College

Private Loans Parent is either borrower or co-signer A bit about loans… Private Loans Parent is either borrower or co-signer Approval and interest rate based on a parent’s credit Limited repayment options While parents may want to take control (and are often the ones paying the bill), it shows a great deal of maturity and sincerity when the student initiates the conversation with the financial aid office. FA Officers will pay attention to this! Secondly, and importantly, you do not want to go in to the financial aid office and try to set up a negotiation. Talk of how School B did this for you and you want School A to match it will not go over well. You can ask them to help you understand the differences in financial aid award offers or their office’s financial aid awarding policy. Your best bet is often in simply expressing your sincere desire to attend, and wanting to make sure that you haven’t left any opportunity on the table – as you are willing to explore every option – as is evidenced by your on-time admission application, FAFSA, institutional financial aid application, etc.

Private or Alternative Loans Loans made by banks or other lending institutions. Each private loan product offers its own terms and conditions—so do your research. Exhaust your federal loan eligibility before you consider a private loan.

Private Loan Considerations Consider the following: Interest rate Fees Repayment options Application of extra payments toward principal Frequency of changes to monthly payment Also important: Cancellation policies, grace period, deferment & forbearance options, benefits, and default

After the Award ASA College Planning Center

Paying off a balance Once you receive your award letters, it is important to understand which school is giving you the most FREE money, which school is leaving you with the biggest balance, and which school might have included mostly loans, PLUS loans, etc. Here is an example of a College Cost Calculator from MEFA, the Massachusetts Education Financing Authority. The colleges you are applying to might also have an interactive calculator to help you determine your Out-of-Pocket Expenses. The website FINAID.ORG has one that also lets you compare college characteristics, such as overall fit, academic quality, even how much snow the school gets! Whatever you use, the bottom line is you must understand what you are paying out of your pocket each semester, each year and for the next 4-6 years.

Exhaust ALL financial aid options before borrowing student loans Borrowing Basics Exhaust ALL financial aid options before borrowing student loans Borrow ONLY what you need! Before thinking about borrowing, exhaust all other aid options. Grants and scholarships are the most attractive aid options since they are “free money” and never have to be repaid. Work-study is an option for you to earn money toward your education by working in an on campu s student work position. Take advantage of tuition reimbursement and assistantships and fellowships as well if they are available. Once you’ve exhausted all other aid options, then look into borrowing. The yearly loan maximums are very generous and are often much more than you need. Don’t borrow this full amount unless you absolutely need it. Before applying, determine your remaining expenses and then borrow only the amount you need. By limiting the amount you borrow, you will have a positive impact on your financial future. Many students need to borrow money to pay for college. Whether you’ve already borrowed, filled out an application for a loan, or are planning to, it’s critical that you know the basics of borrowing money.

-$5000 (Parent Savings from 529 Plan, etc.) $10,000 Paying off a balance Starting Balance = $15,000 New Balance -$5000 (Parent Savings from 529 Plan, etc.) $10,000 -$2000 (Student Savings from summer job) $8,000 -$1500 (Parent payment plan of $150/month) $6,500 -$500 (Student payment plan of $50/month) $6,000 -$6000 Education Loan $0 Once you receive your award letters, it is important to understand which school is giving you the most FREE money, which school is leaving you with the biggest balance, and which school might have included mostly loans, PLUS loans, etc. Here is an example of a College Cost Calculator from MEFA, the Massachusetts Education Financing Authority. The colleges you are applying to might also have an interactive calculator to help you determine your Out-of-Pocket Expenses. The website FINAID.ORG has one that also lets you compare college characteristics, such as overall fit, academic quality, even how much snow the school gets! Whatever you use, the bottom line is you must understand what you are paying out of your pocket each semester, each year and for the next 4-6 years.

$$$ you save now and contribute to the bill Every Penny Counts $$$ you save now and contribute to the bill can help lower your loans bills later Three students at ASA University have a gap of $2,000 a year, after using all of their federal subsidized loans ($19,000). Presentation Title

$80/month $0 Every Penny Counts Add. Loans $8,000 Add. Loans $4,000 Student Contribution Loan Payment Total Over 10 Years Additional Costs Add. Loans $0 $160/month $187 $22,440 $80/month Add. Loans $4,000 $233 $27,960 +$5,520 $0 Add. Loans $8,000 $279 $33,480 +$11,040 Presentation Title

Balance STILL Too Big? Appeal your financial aid award if you think your financial situation has changed since completing the FAFSA. Contact the Financial Aid Office to discuss any additional assistance – not just free money! http://blog.saltmoney.org/how-to-write-a-financial-aid-appeal-letter/ Always always always discuss your situation with the financial aid office, even if you think it won’t make a difference. This is not the time to be humble! Put all your cards on the table, the more they know, the better. STOCK PHOTO: #118953102 OR #457389131 36

Any special circumstances. What To Talk About Any special circumstances. Job loss, significant health care expenses, K-12 school expenses, etc. Where your money goes. Budget worksheets Income and expenses Existing debt* Sending money to family overseas *While most schools will look at existing CONSUMER debt as a lifestyle choice and will not factor it into consideration, some debt, such as parent’s educational loans or money being paid toward educating siblings, may be taken into consideration. STOCK PHOTO # 467994745

How To Talk When possible, the student should be the one asking for more resources. It is okay to sincerely ask 1) for a specific amount, and 2) if there are any other options available to help you attend their institution. Put ALL your cards on the table! The more information you provide, the better you can present your situation. While parents may want to take control (and are often the ones paying the bill), it shows a great deal of maturity and sincerity when the student initiates the conversation with the financial aid office. FA Officers will pay attention to this! Secondly, and importantly, you do not want to go in to the financial aid office and try to set up a negotiation. Talk of how School B did this for you and you want School A to match it will not go over well. You can ask them to help you understand the differences in financial aid award offers or their office’s financial aid awarding policy. Your best bet is often in simply expressing your sincere desire to attend, and wanting to make sure that you haven’t left any opportunity on the table – as you are willing to explore every option – as is evidenced by your on-time admission application, FAFSA, institutional financial aid application, etc.

Thank you

EFC = $2000 Eligible for 66350

$19,350

Provide a recommendation for which college your student should attend. Activity Your student has award letters from 3 colleges – Curry College, Bridgewater State University and UMass Boston. She lives a few blocks from Curry, but really wants the experience of living on campus. She prefers the small, enclosed setting of Curry, and said that she enjoyed the feeling of being “away from it all.” She stated that she was a bit apprehensive about living right in the middle of a city. Evaluate and compare each award using the College Cost Calculator Sheet. Provide a recommendation for which college your student should attend. ASA College Planning Center