Planning for College Merle Lee Manager Davis High School

Today’s goals  Investing in yourself  Choosing a college  More education = more job options  The money you will need and where to find it  Your financial aid journey in five steps  How much do you need to borrow? 1

Invest in Yourself  Education beyond high school can give you skills that you’ll use for the rest of your life, no matter where you live or what job you do  More education may also help you earn a lot more money  Think of education beyond high school as an investment in you  A four-year degree might not be right for everyone; a community or junior college, trade school or technical training are other options to consider 2

Choosing a College When deciding on a school, think about what you want from your college experience and do good research to learn all you can about your prospective schools. Consider:  Type of school  Size of school  Location  Academic programs  Activities  Financial aid 3 Tip! If one school costs more than another, it doesn’t guarantee that the quality of education will be better. Consider other factors, such as the school’s academic strength in your areas of interest. Tip! If one school costs more than another, it doesn’t guarantee that the quality of education will be better. Consider other factors, such as the school’s academic strength in your areas of interest.

How Much More Does Education Pay? Amount of EducationPretax Earnings Professional degree$100,000 Doctoral degree$79,400 Master’s degree$61,300 Bachelor’s degree$50,900 Associate degree$40,600 Some college, no degree$37,100 High school graduate$31,500 Not a high school graduate$23,400 4 Key Points:. Someone with a high school diploma earns almost 35% more money than a person without one. Someone with an associate degree earns almost 30% more money than a high school graduate. Someone with a master’s degree earns almost double the money of a high school graduate. Someone with a professional degree earns almost double the money of someone with a bachelor’s degree.

The Annual Price of Education In-State Tuition, Fees, Room & Board and Books Tuition Only University of Utah$21,216$7,139 Utah State University$17,430$5,940 Westminster$40,500$28,210 BYU – Provo$17,530$4,710 Southern Utah University$14,694$5,576 Dixie State$18,129$4,089 Weber State$16,968$4,310 College of Eastern Utah$7,980$2,472 Utah Valley University$17,486$4,786 5 Sources: Tuition, Fees, Room & Board and Books where gathered from the Net Price Calculators on each higher education website.

What are my family’s options? There are many options that families use to pay for college expenses. 6 *Typically offered through the institution  Income  Savings  Financial aid  Tuition payment plan*  529 Plans  Federal student loans  Private student loans  Investments  Home equity  Lines of credit

What’s the best option?  The best choice is different for every family and individual situation.  What’s right for you doesn’t have to be just one option— a combination of aid, savings, loans and income might be the right choice.  Some things to consider: –What’s your financial situation today? –Will the amount in savings or your 529 plan cover the entire cost, or will you need more? –How much of the cost do you want to cover, and how much do you expect your parents to pay for? 7

How does financial aid fit in?  Many times, financial aid is a lower-cost option for families.  Start with a visit to the school’s financial aid office. They’re the first source for information on grants, scholarships and aid.  It’s the focus of their office to ensure that your family can pay for school. 8

Financial aid myths  Only students with a perfect grade point average get aid.  If your family has a decent income, you won’t qualify for anything.  Only great athletes get grants and scholarships.  There’s so much paperwork involved, it’s not worth the time and effort. 9

Financial aid facts Financial aid is money that:  Can come in the form of grants or scholarships that don’t have to be paid back  Could include a Work Study program  Is offered as loans, even to families that have middle to high income 10

Getting started 11

First things first Complete the Free Application for Federal Student Aid (FAFSA) with your parents. Most undergraduates need their parents’ information to complete the form.  Required in order to qualify for federal aid  Complete this as early as possible after your taxes are complete.  The results are automatically sent to the schools that you indicate.  Be sure to get a PIN before you start—one for your child and one for you—it’s an identification method and can be obtained at pin.ed.gov.pin.ed.gov.  Find the form at fafsa.ed.gov.fafsa.ed.gov. 12 Note: Check with the financial aid office for additional forms or applications that you and/or your child may need to complete.

The FAFSA online 13

Types of aid 14  Don’t have to be repaid  Beware of scams—you should never have to pay to do a scholarship search. Find details on finaid.org and fastweb.com finaid.orgfastweb.com  Awarded based on financial need and/ or academic achievement  Don’t have to be repaid  Some are federally funded and others are state programs  Some institutions have their own private grant programs  Based on financial need  Allows students to earn income working part-time  Can work either on or off-campus ScholarshipsGrantsThe Federal Work-Study Program

What federal loans are available? 15  Need-based  Low interest rates  Fixed interest rates  Government guaranteed  Qualify for unsubsidized regardless of family income  Fixed interest rates  Cover the cost of education  Not need-based Federal Perkins Loans Federal subsidized and unsubsidized loans Direct PLUS Loan for parents and graduate students Federal Direct Loans

How much will college cost?  When planning how much to borrow, consider the following costs: –Tuition & fees: varies by school –Housing: dorm room or rent –Meals: cafeteria or groceries –Books and supplies: buy used textbooks to save –Transportation: the bus or parking pass and gas (Student loans cannot be used for the purchase of a car) –Personal expenses: laundry, toiletries, cell bills, etc.  Consider inflation on tuition and living expenses when calculating the full cost of education. 16

Estimate before borrowing  If your parents decide to borrow for your benefit or if you are borrowing on their own, you’ll want to consider repayment.  No one wants a surprise from that first billing statement. –Use an online loan calculator to see how much the monthly payments will be –Pay attention if a loan has deferred payments. What is borrowed now may accrue interest while you are in school; interest is normally capitalized (added to the balance) at repayment. –If you can afford to, paying the interest or even part of the principal balance while you are in school is a great way to reduce your debt load.  Be realistic—consider your estimated income versus your estimated monthly payments. Ideally, student loan payments should be 10 percent or less of net monthly income. 17

Timeline  As soon as possible after January 1, file the Free Application for Federal Student Aid (FAFSA) at fafsa.ed.gov (don’t forget to get a PIN).  Register for advanced placement tests.  Complete scholarship applications.  Watch for the Student Aid Report (the response from the FAFSA application). JanuaryFebruaryMarch 18

Timeline  Compare financial aid awards  Look for additional funding if aid doesn’t cover the cost  Make sure your final transcripts are sent to the school that you will attend  If you have a summer job, save money! AprilMaySummer 19

What if financial aid isn’t enough? Private student loans  When federal funding and other sources of aid aren’t enough, you may want to consider a private student loan.  Private loans vary by lender, but they typically offer: –Credit based approvals –Variable interest rates –Generous borrowing limits –Deferred repayment 20 Note that most students will need a qualified cosigner to qualify for a private student loan.

More information for students and parents 21  Covers the basics of good money management and the skills you need to create a brighter financial future handsonbanking.org Hands on Banking ®

Any questions? Thanks for your time today. Merle Lee More information: studentaid.ed.gov fafsa.ed.gov anycollege.com collegenet.com fastweb.com studentaid.ed.gov fafsa.ed.gov anycollege.com collegenet.com fastweb.com 22