“Financial Aid Evolution: Change Agents” OASFAA Fall Conference 2015 The Basics: Financial Aid 102 Focus on Financing and Resources Cody McMillen – University of Dayton Catherine Mix – University of Dayton

OASFAA Conference Sponsor – Fall 2015 Thank you to Great Lakes Educational Loan Services, Inc. for their sponsorship of the OASFAA 2015 Fall Conference! “Financial Aid Evolution: Change Agents” OASFAA Fall Conference 2015

Agenda  Focus on financing options  Direct, PLUS, and private loans  Tuition payment plans  Other ways to pay for college:  College savings plans, peer-to-peer lending, crowdfunding, others  Focus on resources for FA administrators  CPS  COD  studentloans.gov  NSLDS  Information for Financial Aid Professionals  Federal Student Aid – YouTube Channel “Financial Aid Evolution: Change Agents” OASFAA Fall Conference 2015

How does America pay for college? Sources of Funds for College by Percentage Source: Sallie Mae “How America Pays for College,” 2009

Direct Loans,  Direct Subsidized and Unsubsidized Loans are two separate, unique types of loans that are awarded separately. * Interest rates recalculated annually and are effective July 1st based on the 10-year Treasury note index plus 2.05%, capped at 8.25% SubsidizedUnsubsidized Need basedNot based on financial need Interest is fixed at 4.29% for new undergraduate loans disbursed during *. Interest is subsidized while the student is in school and during deferment. Interest is fixed at 4.29% for all new loans disbursed during *. Interest accrues from time of disbursement of the funds.

Direct Loans,  Independent Students and Dependent Students whose parents have been denied the PLUS Loan are eligible for additional Unsubsidized Stafford Loans ($4,000 as Freshmen and Sophomores and $5,000 as Juniors and Seniors) 6 Class YearBase Amount Additional Unsubsidized Amount Total Available to Borrow Freshman$3,500$2,000$5,500 Sophomore$4,500$2,000$6,500 Junior$5,500$2,000$7,500 Senior$5,500$2,000$7,500

Parent PLUS Loans Loans to parents of dependent students. Loan limits are up to the cost of education less any financial aid received. Interest rate is 6.84% fixed*. Repayment begins within 60 days of full disbursement. Payments may be deferred while the student is in school. FAFSA completion is required. 7 * Interest rates recalculated annually and are effective July 1st based on the 10-year Treasury note index plus 4.60%, capped at 10.50%

Federal Loans, Subsidized and Unsubsidized Loans 1.068% origination fee. Parent and Graduate PLUS 4.272% origination fee. 8

Private Student Loans  Private Loans are nonfederal student loans that are made by a private lender.  Private lenders may be:  Bank  Credit Union  State Agency  School  Private loans can be in the student’s name, parent’s name, or student and cosigner’s name  Loan approval is based on creditworthiness of the applicant (usually why cosigners are often needed for loans in students’ names)  FAFSA is not required to apply (unless school policy) “Financial Aid Evolution: Change Agents” OASFAA Fall Conference 2015

Private Student Loans  Interest rates : varies by lender, but many offer both variable and fixed interest rates  Approximate average variable rates: from 2.25% to 10.42%  Approximate average fixed rates: from 4.00% to 12.99% (Source: Sallie Mae, “Understanding Gap Financing Options: PLUS Loan for Parents and Private Student Loans,” 2015)  Origination fees : varies by lender, but many offer 0%  Repayment : varies by lender, typically repayment terms are 5-15 years  Many private student loans require payments while students are still in school, but many also offer in- school deferment options  Many lenders have programs to assist struggling borrowers, but these programs are typically not included in the borrower agreement and are at the discretion of the lender  Consolidation through Department of Education : private loans may not be consolidated with federal student loans “Financial Aid Evolution: Change Agents” OASFAA Fall Conference 2015

Tuition Payment Plans  Short-term (typically 12 months or less) installment plans in which tuition may be paid in equal payments each month  Offered through schools and through private entities  Many plans offer 0% interest on monthly payments, but some may have sign- up fees or other finance charges; also may be penalties attached to missing payments  Many plans offer automatic direct debit from bank accounts to make monthly payments  Tuition payment plans can be an alternative to student loans, if students and families are able to afford to pay tuition, but not in one lump sum each term “Financial Aid Evolution: Change Agents” OASFAA Fall Conference 2015

Other Ways to Pay for College  College savings plans  Section 529 plans (Qualified Tuition Programs), either pre-paid or college savings plans  Peer-to-peer lending  Nontraditional form of lending that involves unsecured loans between individuals to pay for education-related expenses  Repayment terms are typically short-term (1-3 years)  May be either “Friends and Family” or “Stranger-to-Stranger”  Examples: GreenNote, Lending Club, Prosper Marketplace “Financial Aid Evolution: Change Agents” OASFAA Fall Conference 2015

Other Ways to Pay for College  Crowdfunding  Nontraditional finance option, in which funds are raised from a large number of people, often via internet-mediated platforms (which usually take a cut of the funds raised)  Used not only for business, artistic, or philanthropic endeavors, but also for going to college  Examples: GoFundMe, Pigit, Zerobound  According to Business Insider, in 2014, GoFundMe hosted almost 107,000 education-related campaigns that grossed $13 million (Source: Rich Barlow, “Students Turn to Crowdfunding to Pay for College,” at BU Today, 2015, “Financial Aid Evolution: Change Agents” OASFAA Fall Conference 2015

Other Ways to Pay for College  Other options:  Credit cards  Home Equity Line of Credit  Retirement Plan Loans  Roth IRA  401(k) “Financial Aid Evolution: Change Agents” OASFAA Fall Conference 2015

Resources for Financial Aid Professionals  CPS  COD  studentloans.gov  NSLDS  Information for Financial Aid Professionals  Federal Student Aid – YouTube Channel “Financial Aid Evolution: Change Agents” OASFAA Fall Conference 2015

CPS – Central Processing System  CPS – What is its purpose?  Data exchange with students, schools, states and federal agencies/systems  FAFSA updates and corrections  Various database matches to ensure student eligibility “Financial Aid Evolution: Change Agents” OASFAA Fall Conference 2015

CPS – Central Processing System  CPS – What does it do?  Processes FAFSA applications and corrections  Calculates the student’s Expected Family Contribution (EFC)  Selects applications for verification  Sends the Student Aid Report (SAR) and Institutional Student Information Record (ISIR) “Financial Aid Evolution: Change Agents” OASFAA Fall Conference 2015

CPS – Central Processing System  Uses for FAA Access to CPS Online -  View student SAR data  Enter a FAFSA or Renewal FAFSA/make corrections  Request ISIR data  Return of Title IV funds  Compare two ISIR transactions “Financial Aid Evolution: Change Agents” OASFAA Fall Conference 2015

CPS – Central Processing System “Financial Aid Evolution: Change Agents” OASFAA Fall Conference 2015

CPS – Central Processing System “Financial Aid Evolution: Change Agents” OASFAA Fall Conference 2015

CPS – Central Processing System “Financial Aid Evolution: Change Agents” OASFAA Fall Conference 2015

CPS – Central Processing System “Financial Aid Evolution: Change Agents” OASFAA Fall Conference 2015

COD – Common Origination and Disbursement  COD – What is its purpose?  Store origination and disbursement records for:  Federal Pell Grants  Iraq & Afghanistan Service Grants  TEACH Grants  Federal Direct loans “Financial Aid Evolution: Change Agents” OASFAA Fall Conference 2015

COD – Common Origination and Disbursement  COD - What does it do?  Processes batches sent from schools and sends response files via SAIG mailbox  Applies edits to accept, correct or reject student records  Maintains all funding information  Various reports available “Financial Aid Evolution: Change Agents” OASFAA Fall Conference 2015

COD – Common Origination and Disbursement “Financial Aid Evolution: Change Agents” OASFAA Fall Conference 2015  Search for the following:  Counseling results (DL, TEACH)  MPN/ATS Completion  PLUS Applications  Endorser Information

COD – Common Origination and Disbursement “Financial Aid Evolution: Change Agents” OASFAA Fall Conference 2015

Student Access – studentloans.gov “Financial Aid Evolution: Change Agents” OASFAA Fall Conference 2015

NSLDS – National Student Loan Data System  NSLDS – What is its purpose?  Central place for FAA’s, students, lenders, guarantors and state agencies to access federal information  Stores historical disbursement data for Federal loans and grants  NSLDS - What does it do?  Collects enrollment information and shares with federal loan services  Establishes eligibility for in-school deferment of student loans  Transfer monitoring  Identify students transferring to your institution in the middle of the award year “Financial Aid Evolution: Change Agents” OASFAA Fall Conference 2015

Information for Financial Aid Professionals (IFAP)  Tools for Schools  Hot Topics  FSA Handbook “Financial Aid Evolution: Change Agents” OASFAA Fall Conference 2015

Federal Student Aid – YouTube Channel  “Financial Aid Evolution: Change Agents” OASFAA Fall Conference 2015

Questions?  Thank you for attending, below is our contact information:  Cody McMillen –  Admission and Financial Aid Counselor  Catherine Mix –  Director, Flyers First Office (one stop shop) “Financial Aid Evolution: Change Agents” OASFAA Fall Conference 2015