1. Private Loans: You’ve Got the Power!!

2. Agenda Meet the Presenters… Wise (and Not-So-Wise) Financing Options PLUS “and” Private Loan Comparisons Federal & Private Loan Trending Federal Reserve Study of 2009… Is it Still Relevant Today? Considering Private Loan Options? Prime and LIBOR Rates: –Information & Trending Keeping It All Compliant: HEOA “Cheat-Sheet” Questions??

3. Carnegie Mellon University Carnegie Mellon University: Private (Non-Profit) Research University Degrees Offered: Bachelor’s, Master’s, Doctor’s Research/Scholarship Enrollment: 6281 Undergraduate; 5777 Graduate students Multiple Branch Campuses: Pittsburgh PA Main Location; (The Heinz College and The Tepper School of Business are located at the Main Campus but are separate graduate degree schools), Carnegie Mellon University in Qatar; Carnegie Mellon University in Silicon Valley California. All Branch campuses locations have been established as eligible for federal aid. Multiple Additional Locations: Australia, Portugal, Rwanda, Japan, California, New York. Institutional Undergraduate Aid FY12: $74 M to 3285 students. FY12 Federal Pell Grants: $3,485,495; 844 students. University Direct Stafford Loan Volume: $56,805,695. FY12 Undergraduate Private Loan Volume: $5.6M; 291 students. 3

4. Kutztown University 4 Kutztown University: public university Degrees Offered: bachelor’s, master’s 2011-12 Enrollment: 9,486 undergraduates, 797 graduates FY2012 Institutional Undergraduate Aid: 1,724 students received 3,970,681 (excluding work study) FY12 Pell Grants: 3,136 students received 11,704,113 FY12 Stafford Loans: 7,218 students received 47,971,848 FY12 PLUS: 1,211 students received $13,229,803 FY12 Private Loans: 1,420 students received 14,840,918

5. Session Disclaimer Alert!!! Before applying for Private Student Loans, borrowers are advised to maximize ALL federal, state and institutional aid! (Not to mention your Aunt Peggy’s generous offer to help!!) 5

6. Some wise… some not so wise?? 6 Education Financing Options: Education Loan Resource Continuum Direct Loan Perkins PLUS Institutional Educational Private Loans Credit Cards Insurance Retirement Accounts Hold Out Until Your Kid Gets to the 11 th Grade then Start Up a 529 Plan Powerball Lottery 1 in 146,107,962 Google

7. PLUS and Private Loan Options PLUSPrivate Primary BorrowerParent/GradStudent Loan Transfer AvailableNoYes, conditions apply FAFSA RequiredYesNo, always recommended Repayment Terms10+ years depending on repay options 10+ years depending on lender In-School Deferments Available Yes Fees Charged4%Lender dependent; Usually “0”… Disbursement Funds sent to school Yes RatesFixedFixed and Variable Consolidation OptionYes

8. Funding Trends (10yr) Source: The College Board Confidential 8

9. Survey Said…!!! Federal Reserve Findings: Source: Federal Reserve Research and Testing, 2009 Confidential 9

10. Survey Said…??!! –General Research Findings: Parents play the central-strong advisory role Confusion surrounding funding options Most will choose the first loan offered Financial aid counselors seen as credible/valuable source of information …(personal counseling preferred over internet searches) Interest Rates matter: Listed as the “primary” criterion for comparing loan options. Reasons given why choosing private loans? –Easier/Less time consuming –Cannot meet the full COA Feral Reserve Research and Testing, 2009 Confidential 10

11. Considering Private Loans?? Borrower Benefits? –Electronic Funds Transfer Discounts –Discount incentives Repayment Options? –Immediate Repayment –Interest Only Payments –In-School Deferment Repayment Terms –10-15-20 years? Co-signer Release Options? –When available? –What are the requirements? Confidential 11

12. LIBOR and Prime Rates Interest Rates – LIBOR: (Current 1 month =.22%...Current 3 month.36%) LIBOR is the interest rate that banks charge each other for one- month, three-month, six-month and one-year loans. LIBOR is an acronym for London InterBank Offered Rate. This rate is that which is charged by London banks, and is then published and used as the benchmark for bank rates all over the world.interest ratebanks – Prime Rate: (Current Prime Rate: 3.25%) The term prime rate refers to the interest rate that banks charge their preferred customers, or those with the highest credit ratings. It is used to determine borrowing costs on many short-term loan products.prime rate Source: Bankrate.com Confidential

13. LIBOR and Prime trends

14. PLA: What It Is… Confidential 14

15. PLA: What it “Ain’t”… Confidential 15

16. PLA: Still“Ain’t”… Confidential 16

17. BUT!!…(There’s always a “BUT”…)  From a presentation by the Department of Education 17

18. Heoa/PLA “Cheat-sheet”… Section 601 Compliant Code of Conduct Distribute Code of Conduct to Staff Once Per Year Truth In Lending Act (TILA) Disclosures Title IV Disclosures Annual Report Provide no private loan information but participate in Title IV RequiredNot Required Provide “ANY” private loan information, including 3-5 year “historical” list Required “On hold”?? Custom PLLRequired Refer to “Third Party” listsRequired 18

19. Read all about it… http://trends.collegeboard.org/?excmpid=MTG1-PR-1-pr http://www.projectonstudentdebt.org/files/pub/private_loan_facts_trends_09.pdf http://www.finaid.org/loans/privateloan.phtml http://www.finaid.org/loans/loantradeoffs.phtml http://www.ted.com/index.php/talks/barry_schwartz_on_the_paradox_of_choice.html http://www.federalreserve.gov/newsevents/press/bcreg/bcreg20090311a8.pdf