1 Investing in your Education

2 Postsecondary Education is an investment in YOUR future!

3 Did you know? An investment is a financial expense you make today in order to get a return – or money back – in the future.

4 Sample Investments: Buying real estate and flipping houses. Investing in the stock market Getting more education to raise your income level over time Collecting antique coins or comic books and then reselling them at a profit. THINK IT THROUGH Some investments are riskier than others. How do you know a smart investment when you see one?

5 Costs of College Every investment has costs. There are different types of costs you encounter when you invest in your future through postsecondary education. These include: Financial costs like tuition, books, room and board, technology and transportation. Opportunity costs like not being able to work full time, not being able to start your career right away, not being able to support a family right away

6 Grants Loans Scholarships Work Study Ways to Pay For College: Financial Aid Types

7 “Free money” Money given to you based on your financial need. Institutional and federal grants can cover a lot of the cost. You need to qualify for the grants. You don’t have to pay them back. Ever. Grants

8 Free money. Money awarded to students who meet certain academic or activity based criteria. Often have to apply You don’t have to pay them back. Ever. Scholarships

9 Work for the school while you are in school! The school pays you to work for it. Awarded on a need basis. You never have to pay it back. Ever. Work Study

10 Money you borrow from the bank or from the government. Has to be paid back plus interest. Interest rates for student loans are much lower than for other types of loans. Loans

11 How It Works: Financial Aid At-a-Glance Cost of Attendance - Family Contribution = Your Financial Need

12 How It Works: Financial Aid Packages Grants: $10,000 Loans: $15,000 over four years Scholarships: $2500 Work Study: $2,500 Each school creates a Financial Aid Package for you based on your financial need: For example, $30,000 could be covered by a combination of:

13 How It Works: Student Loans Most students get grants, scholarships and work study too. But if you don’t, remember that federal student loans have a low interest rate of 4-10%. If you borrow $30,000 in loans over two-four years to pay for your education: Cost per month while you are a student (and six months after you graduate): $0 Cost per month six months after graduation (when repayment begins): About $60/ month Affect on your earning potential: As soon as you begin earning post- secondary credits, your earning potential rises. Affect on your earning potential: When you finish a degree, your earning potential rises exponentially. Check out these career examples… TODAY: Initial Investment Costs and Return TOMORROW: Ongoing Costs and Return

14 Xray Technician (2 year degree) Total borrowed: $15,000 Monthly Income: $2,800 Monthly Loan payment: $30

15 Nurse (4 year degree) Total borrowed: $30,000 Monthly Income: $3,300 Monthly Loan payment: $60

16 Pediatrician (4 year + Advanced degree) Total borrowed: $60,000 Monthly Income: $9,000 Monthly Loan payment: $120

17 How It Works: High Interest Loans If you borrow $30,000 to buy a fancy car at 7% interest: Cost per month as soon as you drive off the lot: $325 Cost per month in 5-10 years after buying the car: $325 How much the car is worth: Less than you paid for it – maybe $20,0000? How much the car is worth: Much less than you paid for it – maybe $10,000? TODAY: Initial Investment Costs and Return TOMORROW: Ongoing Costs and Return

18 So investing in your education is smart… …because the costs are far less than the return, and the risk is minimal.

19 So how do you start making smart investments? 1.Research your financial aid options in 11 th grade by starting a scholarship list and a personal financial portfolio. 2.Apply for financial aid starting in your senior year. And as always…see your Launch and Navigator books, CSNav and your College Summit teacher for help!