FAFSAPlanning For College Wisely
What is FAFSA?
• 1. This is aid from the federal government to help pay for college.
• 2. It is intended to make up the difference between what your family can afford to pay and the cost of college.
• 3. All families are expected to contribute something to the cost of school. This is the Expected Family Contribution-EFC
• 4. More than ½ of the students in college currently receive some sort of aid.
Types of Aid
•1. Loans
•2. Grants
•3. Scholarships
•4. Work Study
What are Loans?
• ~ Loans are borrowed money from the government that must be repaid after the student has graduated from college.
• ~ This type of loan has a much lower interest rate than what you would borrow from a bank or private loan lender.
• ~ There are 2 types of loans. Most common for undergraduates is a Federal Perkins Loan and a Federal Direct Loan.
Specific Loans
• ~ Direct Subsidized Loan: 3.86 % fixed rate is the best choice for students. During college the interest is paid by gov’t. You’ll pay after you graduate. This is a need based loan.
• ~ Direct Unsubsidized Loan: 3.86 % rate but this loan will gain interest while in college.
• ~ There is a 1.051% fee on all direct loans
• ~ Federal Perkins Loans: 5% rate are for students with great financial need with a 9 mo. grace period. Not all colleges participate in this type of aid.
What are Grants?
• ~ This a a gift of money that a student does not have to pay back to the government. It is given to students with great financial need.
• ~ 3 Types: Federal, State, & College• ~ Federal Pell Grant: up to 12 semesters• ~ WI Higher Education Grant/WI Tuition Grant
• www.heab.state.wi.us
• ~ Individual colleges have access to award grant money to help tuition costs
Scholarships
• 1. State sponsored scholarships such as: the All State Scholar award
• 2. Colleges award scholarships based on academic, athletic, or other talent criteria.
• 3. Community scholarships such as the Elks, Kiwanis, and PTA organizations.
• 4. Some private affiliations such as: members of clubs, employers, or union organizations.
Work Study?
• ~ This is an opportunity to gain employment on your college campus.
• ~ The federal government provides the money to the campus for student employment.
• ~ This is an opportunity to pay for regular occurring expenses during the school year.
• ~ It is a great way to get connected to campus resources right away.
When & how do you apply?
• ~ High school students fill out the application in January of their senior year.
• ~ This is an electronic application and can be accessed any time after January 1st. http://www.fafsa.gov
• ~ This is based on the idea all students should have access to higher education regardless of how much money you have.
What are the costs?
• 1. Tuition and Fees, which includes:• Housing• Meal Plan• Transportation• Books & Supplies• Miscellaneous Living Expenses
• This all encompasses Cost of Attendance (COA)
Budgeting
• 1. Be mindful of the costs and your ability to pay back your loans after you graduate.
• 2. All colleges have a Net Price Calculator to help estimate your cost of attendance. This helps to create your budget.
• 3. Use a financial aid planner tool to help with this. Allows you to see the whole process of borrowing and how you are responsible for it.
Tools to use for budgeting
• 3 options to estimate federal aid for cost of attendance• 1. The Net Price Calculator: this is an
option on all college/university web sites
• 2. FAFSA4caster• 3. http://studentaid.ed.gov
• Tips for college preparations and career search
• The Budget Calculator• Student loan management & repayment
tools
Borrowing Tips
• ~ Think of the entire cost of school in terms of monthly payments.
• ~ Borrow only what is needed for direct educational expenses.
• ~ Consider the salary you would take home and who much you could afford to pay back monthly.
• ~ Always check with your school’s financial aid department before pursuing private loans.