10 Things You Gotta Know about Paying for College What Would You Do, If You Knew You Couldnt Fail?

10 Things You Gotta Know about Paying for College EP 21 The Process The Long Plan Strategy The Short Plan Strategy The Free Money The Loans The State System The Other Aid The Offer The Long Haul The Secrets

Update/Review from last month EP 21 EP21 Website The Scholarship Search Book EP21 Timeline New Favorite Timeline

The Process 1000s competing for same $ - New car annually Average Cost of a College Education (click here)(click here) Need – difference between COA and EFC Diff than old days (84% vs 25%) EFC Calculation Tables (click here)(click here) Need-based vs Non-Need-based Aid (not always true!) Financial Aid Limits

The Process Diff methods used to calculate your EFC (Focus – Fed) Formulas used = Federal Methodology (not institution) Demystifying FAFSA (dont wait!) Base Year As of Today 35% vs 6% (% of assets used in FAFSA formula) # of Students in School (verification…no worries) Deadlines are single biggest reason $ is limited/lost I make too much $! – Ignorant mind… The Profile (more detailed than FAFSA)

The Long Plan Strategy 3 Years & Out (Do things that need to be done) Most scholarships won years out - not during Sr. year Why invest? Why plant? Why study? SAT, GPA, etc. More kids in school decreases EFC Retirement – too many parents heading 4 Alpo diet > $60,000 (probably no Pell for 96%) Back to the Future? 529 Plan: College Savings Plan vs Prepaid Tuition Coverdell (Pros & Cons) Buying a home & home equity

The Short Plan Strategy Minimize income/assets the year before starting college Postpone bonus until January after base year < $50K (simplified need test ignores assets, such as assets, cash and savings on hand…only for public schools) Hope Credit and Lifelong Learning Credit ($2,500 & $2,500) Income Brackets (Parent vs Teen) – IRS vs Dept of Educ Opposite: Teen income is assessed more harshly (Parents should never put assets in the teens name during the base year) 10 Ways to Reduce Year Income

The Short Plan Strategy Income protection Student vs Parents 22% < Max rate for parents < 47% (Protected up to $29K -varies) Student protection stops at $3,080 (50% rate above that) May be better off not working base year if income > $3,080??? Income Penalty Exceptions Work Study (say yes!) AmeriCorps Asset Allowance Parents $ $45K taxed at 12% Students contribution is 20% of total assets ($ increases as Senior) Spend your assets (things you need) before completing FAFSA

The Short Plan Strategy Asset Allowance (cont.) Gift Postponements until Senior year or given to parents Liabilities not counted like assets against EFC (pay down consumer debt w/check from grandma) Dependency vs Independency…not easy Residency (cheaper in state); EFC can be lowered if out of state school is selected – but tuition is higher (choices) Can move to states and work 1-yr for residency (varies) Panic Plan (2 yr) – Not a bad fall back plan (reality says...)

The Free Money The Ratio (Loans becoming bigger percentage of fin. aid!) Pell has NO deadline (Govt) // Read page 59 SEOG - good BUT NOT guaranteed (Campus-based) State Grants…you have to work to earn it…Minnie Piper! Scholarships (All Types) – FastWeb.com & Number2.com Service Awards & Fellowships Hidden Free $ Tuition Waivers (before and during admission) Housing Allowances (Resident Assistance) Loan Forgiveness Taxation benefits

The Loans (10 Types) Perkins Loan Subsidized Stafford Loan Unsubsidized Stafford Loan PLUS Loan Alternative (or Private) Loan Consolidated Loans Emergency Loans Forgivable Loans Home Equity Loans State Program Loans FINANCIAL AID LOAN TYPES/LIMITS: CLICK HERE AGE 45!!!

The State System Apply Early Out of State is Expensive (can be waived) Residency & Tuition Reciprocity Other State Assistance (i.e., Tuition Rebate for Texas)

The Other Aid Work Study Co-op Waivers From Fee to Free (i.e., application, housing, etc.) Internships Assistantships CLEP

The Offer (ways to get more) Beat the Deadlines Choose Help Wisely Ace the Forms Check the Student Aid Report for Accuracy Appeal (Professional Judgement) Understand the Letter(s) Know the Ratio (scholarship vs loans) Negotiate Shop Around Choose School

The Long Haul FAFSA has to be done annually Extra Money Cut Big Cost (Buy 3/1 Free; Alumni benefit) Cut Small Cost (Credit Cards; Phones, etc.) Keep Up w/School Work Keep Looking for $ Expand your Horizon (Study Abroad, Spring Break, etc.) Get your Game on Annually

The Secrets Get started in college early (AP, Summer classes, 2+2) Combine Undergrad and Grad School (buy 4, get 1 free) 10 good lending institutions (free info) Summer Secrets (i.e. U of H, Prairie View Summer pgms) Satisfactory Academic Progress (SAP)

Destiny Watch your thoughts, they become your words Watch your words, they become actions Watch your actions, they become habits Watch your habits, they become your character Watch your character, for it determines your destiny

Thanks For Showing UP! You will reap rewards for just showing up. Mark your calendar now for next months workshop. Work on the timeline and catch up if you havent done previous months task. Making the Final Push for College (What I did for my kid)

Reminder from last month EP 21 EP21 Website The Scholarship Search Book EP21 Timeline New Favorite Timeline

Postpone a year-end bonus to the next year Take an unpaid leave of absence Maximize contributions to retirement plans Try to have overtime payments deferred to the next year Dont earn more than $3,080 if youre a student Delay accepting large cash gifts (Senior Year) Accelerate income, if possible, to the year before base yr Sell off losing investments Dont sell off real estate or stocks during the base year Pay down consumer debt 10 Ways to Reduce Year Income

AmeriCorp

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