PAYING FOR COLLEGE

Paying for College

Multiple Select

What are your plans after high school?

• 4 year university

• Community College

• Trade school/work force

• Other :)

Choosing the right school...

• For example: If your degree lands you a higher paying job, a $75,000 debt will be more manageable opposed to a lower paying job that may cause financial burdens and leave with a lifetime to pay off debt.

• Unless the university is an Ivy League, (Haravard, Yale, etc.) future employers do not care where you received your degree, just that you got it.

• Additionally, it is essential to weigh your future salary against the cost of tuition

Multiple Choice

If your college degree will land you a higher-paying job, let's say an annual salary of $120,000. Will a $75,000 debt cause you lifelong financial burdens, or is this reasonable for the wage you will be receiving?

• You'll end up living in your parents basement

• No, you will end up in an abundance of debt, bills, and other financial burdens

• Yes, if you are taking a lot of vacation and sick days

• It's reasonable, you have to accept having debt to be in a high-paying field of work

FAsfa (Free Application for fedral student aid)

• Dependent - assumed to have financial support of parents

• Independent - assumed to be paying for their own education

studentaid.gov/apply-for-aid/fasfsa/filling-out/dependency

• Determines if you are going to recieve federal aid, and how much you will be given. This is based off you or your families incomes.

Open Ended

Who should apply for FASFA?

Vocab

• Student aid report (SAR) - detailed report of your eligibility for financial aid

• Expected family contribution (EFC) - how much you and your family are reasonably expected to pay

• Financial award letter - indicates how much it will generally cost you to attend the school

• Cost of attendance (COA) - the total cost of tuition, books, room, and board. Typically, out-of-state schools have a significant increase in cost!

Multiple Choice

How do state schools and out-of-state universities differentiate?

• by significant cost

• by colors of buildings

Multiple Choice

What does EFC stand for?

• Education for children

• Expected family contribution

• Expected financial cost

• Enormous fun campus

​Cost of attendance (COA) - Excepted family contribution (EFC) = need

Multiple Choice

If the cost of attendence (COA) for Umass Lowell is $26,504 and your expected family contribution is $11,360. What is your NEED?

• $300,000

• $4,098

• $15,144

• $15,980

Grants & Scholarships

• Grant - money given by (government, nonprofit, or private organization)

• Scholarship - money awarded, typically received due to families financial position or outstanding talents/efforts

APPLY FOR ANYTHING YOU CAN

Multiple Choice

Let's say you are awarded a $10,000 sum because of your outstanding talent in water polo. What is this considered by definition?

• COA

• Loan

• Scholarship

• Grant

Anyone is eligible. They function the same way, but the interest is not subsidized and will accumulate.
Both loans are considered better than any private loan

Direct unsubsidized loan

is a loan from the federal government received if you display financial need.
Interest is going to be paid for (subsidized) while you are still in school and for the 6 months after you graduate

​

Direct Subsizdied loan VS.

Student loans, everything you need to know!

Fill in the Blanks

A subsidized loan means that

is going to be paid for by the government

Stay away from private loans!

• Higher interest rates

• The rate can change over time

• Federal loans are generally cheaper and have a fixed rate

• There is less guarantee/stability with private lenders

• Additonally if you have to apply for a private loan this is an indicator that the school you have chosen is far out of your reach (budget wise)

​www.studentdebtcrisis.org

Multiple Choice

Which loan is more sensible to apply for, federal or private?

Federal = fixed rate

Private = subject to change (inc)

• Private

• Federal

INDEPENDENT STUDENTS
- credit check mandatory
- borrowing limits are higher (ex. $40,000)
- no grace period (unlike sub & unsub loans)

Direct Plus loans

Parents of students take out loans in their name and are responsible for paying the money back.

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Parent Plus Loans

More loans...

Student loan interest

To find out how much you'll be paying in total interest, and how much you'll be paying each month, we will use this website below.





https://www.bankrate.com/loans/loan-calculator/

Multiple Choice

Recall: What is the grace period for direct subsidized and unsubsidized loans?

• while in school + 6 months after graduation

• only while you are attending the university

• forever

• until you get your first job after college

Example:

• You graduate with $28,000 in student debt with an interest rate of 4.5%. If you want to pay your debt off in 10 years, how much will you need to pay per month? How much will you need to pay in total interest?

Multiple Choice

• You graduate with $53,000 in student debt with an interest rate of 6.2%. If you want to pay your debt off in 3 years, how much will you need to pay per month?

• $1,617.17

• $1,980.43

• 5,925.13

• 305.89