10 Things You Gotta Know about Paying for College By Brandon Rogers What Would You Do, If You Knew You Couldnt Fail? September 17, 2011

What is EP21? Non-profit: Help prepare you for college Help you search for and acquire scholarships Teach realities/life skills that can change your life Help you get scholarships from companies and SA Help you find volunteer and internship opportunities Help you go after your dreams/goals after H.S. Do what we teach and get into college…do it effectively and earn money for college!

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 By Brandon Rogers

The Process 1000s competing for same $ Need – difference between COA and EFC EFC Calculation Tables Need-based vs Non-Need-based Aid Financial Aid Limits

The Process Diff methods used to calculate your EFC Demystifying FAFSA As of Today 35% vs 6% (% of assets used in FAFSA formula) # of Students in School Deadlines are single biggest reason $ is limited/lost The Profile (more detailed than FAFSA) 1040A or 1040EZ vs the 1040 Long

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? Why prepare? 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 ($1500 & $2000) (See IRS Form 8863 or 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 $29,000) Student protection stops at $2,380 (50% rate above that) Better off not working during base year if income < $2,380??? Income Penalty Exceptions Work Study (say yes!) AmeriCorps Asset Allowance Parents $ $40K taxed at 12% Students contribution is 35% of total assets ($ 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)

The Free Money Pell has NO deadline (Govt) SEOG - good BUT NOT guaranteed (Campus-based) State Grants are out there…but you have to go get it! Scholarships (All Types) – FastWeb.com….Number2.comFastWeb.comNumber2.com Service Awards & Fellowships Hidden Free $ Tuition Waivers Housing Allowances Loan Forgiveness Taxation

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

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

The Other Aid Work Study Coop 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

EFC Calculation Tables One inCollege Family Size543 Income $20, $40,000$1,200$2,000$3,000 $60,000$6,100$7,800$9,700 $80,000$14,400$16,000$18,000 $100,000$23,200$25,000$27,000

EFC Calculation Tables Two inCollege Family Size543 Income $20, $40,000$800$1,200$1,700 $60,000$3,500$4,400$5,400 $80,000$7,700$8,600$9,600 $100,000$12,000$13,000$14,000

Financial Aid Annual Limits Pell Grant: $4,050 SEOG: $4,000 Perkins Loan: $4,000 PLUS Loan: Up to COA, minus other aid Work-Study: Usually a maximum of 20 hours/week Stafford Loans: Fr Yr: $2,625 So Yr: $3,500 Jr/Sr Yr: $5,500 Additional Unsubsidized Stafford Loan Fr/So Yr: $4,000 Jr/Sr Yr: $5,000

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 $2,380 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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