1. Financial Aid Financial Literacy Spring 2012 209.946.2421  financialaid@pacific.edu www.pacific.edu/financialaid

2. Overview Resources Terms to understand Loans Capitalization, Interest and Repayment Updates

3. New Financial Resources Types of Financial Aid Loans Financial Aid Resources Literacy, Budget, Student Consumer & Glossary FAQ What would you like?

4. Definition: Financial Literacy Financial literacy is the ability to understand and analyze your finances and your financial opportunities, enabling you to participate more fully in the decisions you make by making informed choices. We want our students to have opportunities to be financially literate when they step onto campus, with the goal of producing graduates who are prepared to successfully handle the financial responsibilities of life.

5. Financial Eligibility  Estimated academic year Costs of Attendance  Tuition and other actual and estimated costs  Expected Family Contribution (EFC)  Calculated on the basis of FAFSA information using formulas prescribed by the federal government  Financial Need (as indicated by FAFSA)  Most aid is for students who demonstrate financial need  Exceptions: PLUS Loan (parents), Unsubsidized Stafford Loan Your eligibility can vary from school to school! www.studentaid.ed.gov/pubs

6. Sub vs. Unsub Subsidized Loans are a type of loan in which the interest associated with the loan is paid by the government while the student is enrolled in school (in-school deferment) at least half-time. The student does not have a responsibility to repay interest paid by the government. Unsubsidized Loans are a type of loan in which the student is responsible for the interest that accrues on the loan while in school. Depending on the loan the student may have the option to defer payment of accrued interest until after graduation (i.e. not pay until after graduation) or dropping below half-time.

7. Stafford Loans Students who demonstrate financial need may qualify for a subsidized Stafford Loan; others may qualify for an unsubsidized loan. The interest rate on the Federal Direct Stafford Loan is a fixed rate. The interest rate for loans disbursed on or after July 1, 2012 is: Federal Direct Stafford Loan (subsidized) Only available to undergraduate students - 6.8% Federal Direct Stafford Loan (unsubsidized) All students - 6.8% www.pacific.edu/financialaid

8. Federal Perkins Loan Perkins is “serviced” by Pacific (ECSI) 9 Month Grace Period 5% fixed interest rate Demonstrate financial need Perkins “Exits” are handled separately Questions? go.pacific.edu/studentloans

9. Federal Direct PLUS Loans:  Federal PLUS Loan (Application Online)  For parents of dependent undergraduate students  FAFSA required - 7.9% interest rate  4% fee upon disbursement  Credit based  Denial allows for increase of Unsub Loans

10. Loan Exit “Interviews” Is required before you withdraw, graduate, or drop below half-time attendance (even if you plan to transfer to another school) Helps you understand your rights and responsibilities as a student loan borrower Provides useful tips and information to help you manage your loans May have 2 sets (EX/SL holds)

11. NSLDS (National Student Loan Data System) The National Student Loan Data System (NSLDS) is the U.S. Department of Education's (ED's) central database for student aid. NSLDS receives data from schools, guaranty agencies, the Direct Loan program, and other Department of ED programs. NSLDS Student Access provides a centralized, integrated view of Title IV loans and grants so that recipients of Title IV Aid can access and inquire about their Title IV loans and/or grant data. www.nslds.ed.gov

12. Forbearance, Deferment and Grace Grace Period—Amount of time before loan repayment begins after dropping below half-time or leaving school. 6 months for Stafford and 9 months for Perkins. Deferment—Postpone repayment of your loans temporarily. Forbearance—forbearances allow you to temporarily postpone repayment. Forbearance may also involve an extension of time to make payments or acceptance of smaller payments. Unlike deferments, forbearances may be granted if you are already in default (hardship).

13. $3,500 loan: 6.8% Interest: 4 years in school: Capitalize Interest:Interest Paid in school: Amount Borrowed:$3,500 Monthly Interest Payment (while in school): $0$19.84 Interest to Capitalize:$952$0 Principle Balance at Repayment: $4,452$3,500 Estimated Monthly Payment (once in repayment): $50 Total Payments:$5,950$5,302 Total Interest Paid:$2,450$1,802 Total Savings:N/A$648 Understanding Capitalized Interest: Capitalized interest is interest that accrues on your initial loan amount while you are still enrolled. The chart below demonstrates an example of the difference between paying your loan monthly interest payments vs. deferring interest payments until after you graduate.

14. Repaying Your Loans* Amount #Pay Payment @ 6.8% Total Paid $11,500 120 $132.34 $4,381 $15,881 $13,500 120 $155.36 $5,143 $18,643 $15,500 120 $178.37 $5,904 $21,404 $17,500 120 $201.39 $6,667 $24,167 $19,500 120 $224.42 $7,429 $26,929 $21,000 120 $247.42 $8,190 $29,690 *Amounts based on Stafford loan rates over 10 years

15. Graduate Aid Assistantships Grad PLUS loan Unsubsidized Stafford Loan

16. Repaying Your Loans #2* Amount #Pay Payment @ 7.9% Total Paid $10,000 120 $120.80 $4,496 $14,496* $20,000 120 $241.60 $8,992 $28,992 $30,000 120 $362.40 $13,488 $43,488 $40,000 120 $483.00 $17,984 $57,984 $50,000 120 $604.00 $22,480 $72,480 *+$50 every month saves $1,500 over course of loan *Amounts based on PLUS loan rates over 10 years

17. Cal Grant July (Budget) Assumed in Packaging University Contingency Plans

18. Need help? Contact us: Financial Aid Office  Knoles Hall Open Monday–Friday, 8:30–5:00 Alternate Summer Hours Counselors available (except Wednesday mornings) 9:30–12:00 and 1:00–4:00 209.946.2421 financialaid@pacific.edu www.pacific.edu/financialaid