1. Funding Your College Education: What are you getting yourself into? Rossford Guidance Office Dan Saygers, Counselor

2. Funding your college education Congratulations on getting into a college Congratulations on getting into a college Common questions: Common questions: Can I afford to go? Can I afford to go? I received my letter(s) telling me how much it will cost, but I’m not sure what it means? I received my letter(s) telling me how much it will cost, but I’m not sure what it 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 this! I’m going to let my parents deal with this!

3. Funding your college education Understanding your award statement from the Financial Aid Office Understanding your award statement from the Financial Aid Office Everything should be clearly marked as a scholarship, grant or loan Everything should be clearly marked as a scholarship, grant or loan The entire cost of attending, including tuition, room/board, and other expenses should be listed The entire cost of attending, including tuition, room/board, and other expenses should be listed Even fees for processing loans are listed Even fees for processing loans are listed

4. Scholarships, grants Sources of money that you don’t have to pay back!!!! Sources of money that you don’t have to pay back!!!! Often, scholarships just take the place of grants Often, scholarships just take the place of grants Some may be single-year awards, others may be renewable, but you may have to meet gpa requirements – make sure you understand what these are! Some may be single-year awards, others may be renewable, but you may have to meet gpa requirements – make sure you understand what these are!

5. Student Loans Student loans are in your name Student loans are in your name You have to pay them back You have to pay them back They stick to you better than glue They stick to you better than glue The Fed Gov will withhold your income tax refund if you aren’t paying back your student loans The Fed Gov will withhold your income tax refund if you aren’t paying back your student loans Some loans are better than others Some loans are better than others Avoid student loans if you can, but they are an important part of most student’s plan Avoid student loans if you can, but they are an important part of most student’s plan

6. Types of Student Loans Federal Student Loans Federal Student Loans College-Based Loans College-Based Loans Alternative Loans Alternative Loans There are big differences between these. Some are good, some not so good! There are big differences between these. Some are good, some not so good!

7. Some important points All student loans involve interest, a monthly fee based on the principal amount of the loan All student loans involve interest, a monthly fee based on the principal amount of the loan Some loans are subsidized, others are not (more later) Some loans are subsidized, others are not (more later) Interest rates can vary widely based on the type of loan Interest rates can vary widely based on the type of loan Terms of repayment also vary Terms of repayment also vary

8. Sub or Unsub? Subsidized loans don’t accrue interest until you stop taking classes (hopefully after you graduate) Subsidized loans don’t accrue interest until you stop taking classes (hopefully after you graduate) Actually the Gov pays for the interest Actually the Gov pays for the interest Unsubsidized loans start accruing interest as soon they are dispersed Unsubsidized loans start accruing interest as soon they are dispersed What does this mean? What does this mean? We’ll check this out in a minute We’ll check this out in a minute

9. Student Loans Best Federal Perkins Loans Federal Perkins Loans Always subsidized Always subsidized Lowest interest rate: 5.0% Lowest interest rate: 5.0% You can borrow up to $4000/year, but that is the maximum and probably not likely You can borrow up to $4000/year, but that is the maximum and probably not likely 9 month grace period before repayment must begin, but this can be deferred if you go back to school 9 month grace period before repayment must begin, but this can be deferred if you go back to school Qualification based on FAFSA Qualification based on FAFSA

10. Student Loans Really Good (sub) or Good (unsub) Federal Stafford Loans Federal Stafford Loans Subsidized or Unsubsidized Subsidized or Unsubsidized Interest rate: 6% sub and 6.8% unsub, Interest rate: 6% sub and 6.8% unsub, but changes from year to year 6 month grace period before repayment must begin, but this can be deferred if you go back to school (unsub keeps accruing int) 6 month grace period before repayment must begin, but this can be deferred if you go back to school (unsub keeps accruing int) 1 st year 3500, 2 nd year 4500, 3 rd /4 th 5500 1 st year 3500, 2 nd year 4500, 3 rd /4 th 5500

11. Student Loans Only if you really have to College-based loans College-based loans Terms are set by the college and so they can vary Terms are set by the college and so they can vary Probably not subsidized Probably not subsidized Interest rates probably better than alternative loans Interest rates probably better than alternative loans

12. Student Loans Only if you are desperate Alternative loans Alternative loans Offered by banks, lending institutions Offered by banks, lending institutions Interests rates can be very high Interests rates can be very high Interest begins accruing immediately Interest begins accruing immediately Some students will take these out even if they already have other student loans Some students will take these out even if they already have other student loans Danger – back away from the loan agreement Danger – back away from the loan agreement

13. Parent Loans Good for you, but not for Mom and Dad Federal Parent PLUS Loans Federal Parent PLUS Loans Parents can borrow up to the full cost of attendance Parents can borrow up to the full cost of attendance 8.5% interest rate 8.5% interest rate Starts accruing interest immediately Starts accruing interest immediately Repayment starts 60 days after dispersement Repayment starts 60 days after dispersement These are probably the best loans your parents will be able to get to pay for you to go to college These are probably the best loans your parents will be able to get to pay for you to go to college

14. Check this out Loan calculator Loan calculator http://www.accessgroup.org loan calculator http://www.accessgroup.org loan calculator http://www.accessgroup.org loan calculator http://www.accessgroup.org loan calculator

15. The fine print Loan origination fees Loan origination fees Every time you get a loan (each year) there will be a fee taken out, which means you don’t get the full amount Every time you get a loan (each year) there will be a fee taken out, which means you don’t get the full amount Most students end up borrowing more in their 3 rd and 4 th years Most students end up borrowing more in their 3 rd and 4 th years Grants may not be offered like they were at first Grants may not be offered like they were at first Especially in your 4 th year, they know you’re more likely to keep paying so that you can graduate Especially in your 4 th year, they know you’re more likely to keep paying so that you can graduate

16. More fine print You can’t get Fed Student loans without filing a FAFSA You can’t get Fed Student loans without filing a FAFSA The average student debt in Ohio last year was $19,000 The average student debt in Ohio last year was $19,000 Student loans have a 10 year repayment schedule which starts as soon as you stop attending Student loans have a 10 year repayment schedule which starts as soon as you stop attending

17. So what does this mean, anyways? Read your financial award statement carefully Read your financial award statement carefully Don’t take any loans unless you really have to Don’t take any loans unless you really have to Some college majors may be a better risk for taking on debt Some college majors may be a better risk for taking on debt

18. How else can you get into trouble? Credit cards Credit cards College students are targets College students are targets Flunking out Flunking out You may have big student loan debts and nothing to show for it You may have big student loan debts and nothing to show for it Don’t go to college for the parties Don’t go to college for the parties College is too expensive to waste it partying College is too expensive to waste it partying