“Financial Aid Evolution: Change Agents” OASFAA Fall Conference 2015 The Basics: Financial Aid...

“Financial Aid Evolution: Change

Agents”

OASFAA Fall Conference 2015

The Basics: Financial Aid 102 Focus on Financing and Resources

Cody McMillen – University of Dayton

Catherine Mix – University of Dayton

OASFAA Conference Sponsor – Fall 2015

Thank you to Great Lakes Educational Loan Services,

Inc. for their sponsorship of the OASFAA 2015 Fall Conference!

“Financial Aid Evolution: Change Agents” OASFAA Fall Conference 2015

Agenda

Focus on financing options

Direct, PLUS, and private loans

Tuition payment plans

Other ways to pay for college:

College savings plans, peer-to-peer lending, crowdfunding, others

Focus on resources for FA administrators

CPS

COD

studentloans.gov

NSLDS

Information for Financial Aid Professionals

Federal Student Aid – YouTube Channel


How does America pay for college?Sources of Funds for College by Percentage

Source: Sallie Mae “How America Pays for College,” 2009

Direct Loans, 2015-2016

Direct Subsidized and Unsubsidized Loans are two separate, unique types of loans that are awarded separately.

*Interest rates recalculated annually and are effective July 1st based on the 10-year Treasury note index plus 2.05%, capped at

8.25%

Subsidized UnsubsidizedNeed based Not based on financial

need

Interest is fixed at 4.29% for new undergraduate loans disbursed during 2015-16*. Interest is subsidized while the

student is in school and during deferment.

Interest is fixed at 4.29% for all new loans disbursed during 2015-16*. Interest

accrues from time of disbursement of the funds.

Direct Loans, 2015-2016

Independent Students and Dependent Students whose parents have been denied the PLUS Loan are eligible for additional Unsubsidized Stafford Loans ($4,000 as Freshmen

and Sophomores and $5,000 as Juniors and Seniors)

6

Class Year Base AmountAdditional

Unsubsidized Amount

Total Available to Borrow

Freshman $3,500 $2,000 $5,500

Sophomore $4,500 $2,000 $6,500

Junior $5,500 $2,000 $7,500

Senior $5,500 $2,000 $7,500

Parent PLUS Loans

• Loans to parents of dependent students.• Loan limits are up to the cost of

education less any financial aid received.• Interest rate is 6.84% fixed*. • Repayment begins within 60 days of full

disbursement. Payments may be deferred while the student is in school.

• FAFSA completion is required.

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*Interest rates recalculated annually and are effective July 1st based on the 10-year Treasury note index plus 4.60%, capped at 10.50%

Federal Loans, 2015-2016

• Subsidized and Unsubsidized Loans

• 1.068% origination fee.

• Parent and Graduate PLUS

• 4.272% origination fee.

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Private Student Loans

Private Loans are nonfederal student loans that are made by a private lender.

Private lenders may be:

Bank

Credit Union

State Agency

School

Private loans can be in the student’s name, parent’s name, or student and cosigner’s name

Loan approval is based on creditworthiness of the applicant (usually why cosigners are often needed for loans in students’ names)

FAFSA is not required to apply (unless school policy)


Private Student Loans

Interest rates: varies by lender, but many offer both variable and fixed interest rates Approximate average variable rates: from 2.25% to 10.42%

Approximate average fixed rates: from 4.00% to 12.99%

(Source: Sallie Mae, “Understanding Gap Financing Options: PLUS Loan for Parents and Private Student Loans,” 2015)

Origination fees: varies by lender, but many offer 0%

Repayment: varies by lender, typically repayment terms are 5-15 years Many private student loans require payments while students are still in school, but many also offer

in-school deferment options

Many lenders have programs to assist struggling borrowers, but these programs are typically not included in the borrower agreement and are at the discretion of the lender

Consolidation through Department of Education: private loans may not be consolidated with federal student loans


Tuition Payment Plans

Short-term (typically 12 months or less) installment plans in which tuition may be paid in equal payments each month

Offered through schools and through private entities Many plans offer 0% interest on monthly payments, but some may have

sign-up fees or other finance charges; also may be penalties attached to missing payments

Many plans offer automatic direct debit from bank accounts to make monthly payments

Tuition payment plans can be an alternative to student loans, if students and families are able to afford to pay tuition, but not in one lump sum each term


Other Ways to Pay for College

College savings plans Section 529 plans (Qualified Tuition Programs), either pre-paid or

college savings plans

Peer-to-peer lending Nontraditional form of lending that involves unsecured loans between

individuals to pay for education-related expenses Repayment terms are typically short-term (1-3 years) May be either “Friends and Family” or “Stranger-to-Stranger”

Examples: GreenNote, Lending Club, Prosper Marketplace



Crowdfunding Nontraditional finance option, in which funds are raised from a large

number of people, often via internet-mediated platforms (which usually take a cut of the funds raised)

Used not only for business, artistic, or philanthropic endeavors, but also for going to college

Examples: GoFundMe, Pigit, Zerobound

According to Business Insider, in 2014, GoFundMe hosted almost 107,000 education-related campaigns that grossed $13 million

(Source: Rich Barlow, “Students Turn to Crowdfunding to Pay for College,” at BU Today, 2015, http://www.bu.edu/today/2015/students-turn-to-crowdfunding-to-pay-for-college/# share-tools)


http://www.bu.edu/today/2015/students-turn-to-crowdfunding-to-pay-for-college/#share-tools

http://www.bu.edu/today/2015/students-turn-to-crowdfunding-to-pay-for-college/#share-tools


Other options:Credit cardsHome Equity Line of CreditRetirement Plan Loans Roth IRA 401(k)


Resources for Financial Aid Professionals

CPS

COD

studentloans.gov

NSLDS

Information for Financial Aid Professionals



CPS – Central Processing System

CPS – What is its purpose?

Data exchange with students, schools, states and federal agencies/systems

FAFSA updates and corrections

Various database matches to ensure student eligibility



CPS – What does it do?

Processes FAFSA applications and corrections

Calculates the student’s Expected Family Contribution (EFC)

Selects applications for verification

Sends the Student Aid Report (SAR) and Institutional Student Information Record (ISIR)



Uses for FAA Access to CPS Online - https://faaaccess.ed.gov

View student SAR data

Enter a FAFSA or Renewal FAFSA/make corrections

Request ISIR data

Return of Title IV funds

Compare two ISIR transactions


https://faaaccess.ed.gov/

https://faaaccess.ed.gov/









COD – Common Origination and Disbursement

COD – What is its purpose?

Store origination and disbursement records for:

Federal Pell Grants

Iraq & Afghanistan Service Grants

TEACH Grants

Federal Direct loans



COD - What does it do?

Processes batches sent from schools and sends response files via SAIG mailbox

Applies edits to accept, correct or reject student records

Maintains all funding information

Various reports available




Search for the following:

Counseling results (DL, TEACH)

MPN/ATS Completion

PLUS Applications

Endorser Information



Student Access – studentloans.gov


NSLDS – National Student Loan Data System

NSLDS – What is its purpose?

Central place for FAA’s, students, lenders, guarantors and state agencies to access federal information

Stores historical disbursement data for Federal loans and grants

NSLDS - What does it do?

Collects enrollment information and shares with federal loan services

Establishes eligibility for in-school deferment of student loans

Transfer monitoring

Identify students transferring to your institution in the middle of the award year


Information for Financial Aid Professionals (IFAP)

Tools for Schools

Hot Topics

FSA Handbook



https://www.youtube.com/user/FederalStudentAid/videos


Questions?

Thank you for attending, below is our contact information:

Cody McMillen – [email protected]

Admission and Financial Aid Counselor

Catherine Mix – [email protected]

Director, Flyers First Office (one stop shop)


mailto:[email protected]

mailto:[email protected]

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“Financial Aid Evolution: Change Agents” OASFAA Fall Conference 2015 The Basics: Financial Aid...

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