1. Financial Aid Information session what you need to know
Speaker: Shawn Murphy Director, Business Development
September 2017

2. How Families are Paying for College
<Note: This slide is intended to be used with Plan for College presentations as an introduction to the importance of planning for college as highlighted from the findings in the How America Pays for College report>
Let’s dig deeper into what the study revealed about how Americans are paying for college.
Based on the findings in the 2016 How America Pays for College study, during the academic year, families spent on average $23,000 per year for a 4-year public college, and almost $42,000 each year for a private college, which is about the same as the prior year.
The study also indicates that families are using a variety of sources to pay for college—from income and savings to free money to loans. So how are families covering the cost of college?
This pie chart shows the portion of total college costs (paid in the US today) that are paid from six source categories:
Student Borrowing
Parent Borrowing
Parent Income & Savings
Grants & Scholarships
Relatives & Friends
Student Income & Savings
A key finding from the 2016 study is that scholarships and grants surpassed parent income and savings in largest funding source. Last year, parent income and savings were the top source of funding in AY , surpassing scholarships and grants for the first time since 2010.
This year income and savings from parents and students combined paid for 41% of college costs (29% parent contribution, 12% student contribution).
From the 2016 study, 34% of college costs are covered by free money from grants and scholarships.
Income and savings from parents and students combined paid for 41% of college costs (29% parent contribution, 12% student contribution). This is good news, right?
And we know that 48% of families are saving for college, but sadly that percentage has been consistently declining since But planners save more than non-planners, it’s a fact – they save 46% more!
In this economy, we all know that saving for college can be challenging for families, but every little bit counts, so as you are counseling families, it's important to convey that it’s never too early or too late to start saving.
Families can take simple steps to start saving….It can be as simple as a student using money from birthdays and holiday celebrations to help save money for college. Even a small amount saved might reduce the amount needed to borrow. That’s why it’s important for families to have a plan in place.
So let’s talk specifically about accounts that families can be set up to save for college.
<Transition to next slide>
Source: How America Pays for College 2017

3. How the Typical Family Pays for College, Year-over-Year Look
When it comes to paying for college, who in the family is actually laying cash on the table? By that I mean contributing their savings, their income or paying with student loans that they’ve taken in their own names (thus are responsible for repaying).
13% of families were able to pay for college in without having to pay anything out of pocket—all expenses were paid from scholarships, grants and some additional gift contributions (do not need to repay) from extended family/friends.
In 41% of families, both the student and parent contribute something—they share the responsibility.
The breakout of families where the parents contribute and the student pays nothing, and vice-versa, are remarkably the same at 23%.
(In 23% of families the parent contributes savings, income or loans and the student pays nothing. In another 23% of families, the student contributes savings, loans or borrowed money and the parent pays nothing.)
Note: In our recent How America Saves for College 2016 study (to be released late September) which surveys parents with children under the age of 18 about their attitudes toward college and preparing to pay for it, the portion of families who say the student and parent should share responsibility is 51%; those who said the parent should have sole responsibility was 30% compared to only 9% who said the student should have responsibility. (Another 10% said it should be the responsibility of the government of some other entity).
Source: Sallie Mae and Ipsos, How America Pays for College 2017

4. Topics for Tonight Terminology What is financial aid? College Costs
Net price
Types of financial aid
Applications
Scholarships
Gap Financing
Planning Tools
Closing Remarks

5. Terminology
COA – Cost of Attendance
EFC – Expected Family Contribution
Need or Financial Need – Result of COA – EFC

6. What is Financial Aid?
Financial aid is money provided to students to help supplement their ability to pay for educational expenses
Colleges and universities award financial aid based on the following factors:
Academic merit
Demonstrated financial need (calculated from the previous slide)

7. Varies widely from school to school Direct costs: Tuition and fees
College Costs
Varies widely from school to school
Direct costs:
Tuition and fees
Room and board
Indirect costs:
Books and supplies
Personal expenses
=Total cost or
Cost of Attendance

8. Net Price
All undergraduate institutions are required to offer a net price calculator that provides students an estimate to attend their college
Net price is the difference between the “sticker” price (full cost) to attend, minus any grants and scholarships for which the student may be eligible
Key Point - The sticker price of a college is usually NOT what families end up paying

9. Types of Financial Aid Available
Need based financial aid requires financial need
Non-need based financial aid does not require financial need
Federal and State Programs (Pell Grant, Colorado Student Grant)
Work-study Allocation*
Students typically work on campus hours a week
Federal Direct Student Loans (Subsidized and Unsubsidized)
$$$ Funding is provided by the U.S. Treasury
Yearly maximums by grade level
Typical four year maximum= $27,000
$ month for 10 years
Alternative or Private Education Loans – help families address the remaining gap

10. How is Financial Aid Awarded?
FAFSA (Results in a constant EFC – no matter the school)
Website: fafsa.ed.gov
Required to determine eligibility for federal, state and institutional aid programs which can include scholarships, grants, work-study and student loans.
CSS PROFILE
Many private universities and some scholarship providers require the CSS PROFILE application to determine eligibility for non-federal and non-state financial aid.
Why schools use it?
Website: profileonline.collegeboard.org
Colorado schools that require the PROFILE:
Colorado State University – Fort Collins, Colorado College and University of Denver

11. FAFSA Timing Changed for Academic Year 2017-2018
Starting with the academic year filing the Free Application for Federal Student Aid (FAFSA) was available for completion starting October 1, 2016
Gives families more time to file
Simplify data collection by using last years income tax information
Reduction in errors and improve accuracy
Institutions will have the data earlier, but they may not change timing of awarding all students
Allows families opportunity to request a more accurate estimated financial aid award letter from some institutions

12. The Mystery of the EFC Two basic components
Parent contribution (if separated or divorced use parent household that contributes > 50%) must include step-parent information if filing parent is remarried
Student contribution
Calculated using data from application and multi-faceted formulas (Google search “EFC formula”)
Application data
Income, taxes paid, other financial information, untaxed income, assets, household size and # in college
Dependency status – FAFSA determined, NOT IRS
Estimated EFC Calculator - apps.collegeboard.com/fincalc/efc_welcome.jsp

13. Scholarships

14. Scholarships Play An Increasingly Important Role In Paying For College
From our 2016 study, we know that:
The average annual scholarship amount among undergraduates using scholarships in AY was $8,976
50% of families used scholarships to help fund college
Scholarships covered 19% of college costs
And, a little known fact is that students already enrolled in college have access to scholarships too! Over 50% of scholarships are available to students already in college!
How America Pays for College 2017, Sallie Mae and Ipsos.
Source: Sallie Mae Scholarship Search database.

15. Community involvement Organization membership Sports Talent or skill
Scholarships Are Awarded For A Variety Of Reasons
Academic achievement
Financial need
Community involvement
Organization membership
Sports
Talent or skill
Leadership/School activities
Ethnicity
Religious affiliation
Parent affiliation with work, club or activity

16. Scholarship Resources
There are many resources for scholarships:
Local or community-based scholarships
Federal and state agencies
College-specific scholarships offered by the colleges your students are interested in attending
Religious organizations
Employers
Libraries
Private organizations or major companies
Online search engines that aggregate scholarship offerings and allow users to be matched to scholarships based a personal profile

17. Scholarships Resources
Private Resources
KFC Scholarships
Coca-Cola Scholarships
Wal-Mart Scholarships
Exxon Mobil Scholarship
Ronald McDonald House Charities Scholarships
Examples of Free Search Engines
Scholarship Search by Sallie Mae® provides free access to more than 5 million scholarships worth up to $24 billion
SallieMae.com/ScholarshipSearch
Fastweb features over 1.5 million scholarships worth up to $3.4 billion
Fastweb.com/college-scholarships
Big Future by the College Board offers scholarships, other financial aid and internships from more than 2,200 programs, totaling nearly $6 billion
bigfuture.collegeboard.org/scholarship-search

18. Look for search engines that offer:
Best Practices When Using Search Engines
Look for search engines that offer:
FREE searches
Calendar listing scholarships by deadline
Filtering capabilities:
By name
By deadline
By award amount
Rating of scholarships
Adjustable settings
alerts when new scholarship matches are available
The ability to save profile information
Responsive design

19. Scholarship Basics – Things to Remember
Each scholarship will have its own set of eligibility criteria and application requirements
Each will have its own deadline
Applicants may be required to write an essay, pass a written exam, or complete a project demonstrating their potential
Programs may specify how scholarship funds must be used, set time restrictions for disbursing the funds, or set a ceiling on qualifying family income
Scholarship funds may be paid directly to the college
Failure to meet certain requirements could jeopardize a student’s ability to keep the scholarship

20. Gap Financing Options: Private Education Loan & Parent PLUS Loans WHAT YOU NEED TO KNOW

21. (Rates for Sallie Mae Smart Option Student Loan are shown)
Gap Financing Options for Parents to Consider
PLUS Loan for Parents
Private Student Loans
(Rates for Sallie Mae Smart Option Student Loan are shown)
Variable Interest Rate
N/A
LIBOR % to LIBOR %
3.12% % APR
Fixed Interest Rate
7.00% for Academic Year
5.75 to 12.88%
5.74% % APR
Origination Fees
4.276% through October 1, 2017
Varies by lender - most offer 0%
Responsibility to Pay
Parent
Student and cosigner (if applicable)
or Parent (for private Parent Loans)
Cosigner Requirements
No, the parent will need to pass a credit check and if they fail, may qualify with a creditworthy endorser
No, but students with little or no credit history may have difficulty qualifying for a loan without a cosigner. Having a cosigner can also help the student qualify and obtain a better rate.
Cosigner Release
Yes. Many lenders provide a cosigner release option where the student can apply to release the cosigner after they graduate, make a specified number or on-time payments and meet underwriting requirements.
Enrollment Status
At least half time
Varies by lender but offer loans to borrowers who are less than half time
Standard Repayment Term
10 – 25 years
Varies by lender – typically 5-15 year terms
Benefits
0.25 percentage point interest rate reduction for automatic debit enrollment
Most lenders offer a 0.25 percentage point interest rate reduction for automatic debit enrollment. Additional benefits vary by lender.

22. Remember that the financial aid process is renewed each year
Closing Remarks
Remember that the financial aid process is renewed each year
Meet all financial aid deadlines to get the most funding
Be sure to compare awards and determine net price – not just the sticker price at each school of interest

23. Sallie Mae College Planning Help
Planning Tools
Sallie Mae College Planning Help
SallieMae.com/CollegePlanningToolbox