1. College Financing 101 An Educational Seminar – Powered by NASA FCU Presented by: Steve Wynne Account Executive – Client Relations and Education Presented by: Charles Hudson

2. Introductions Why the “Gap”? - Why the “Investment”? How it all (should) begin! Funding Options…FREE – CHEAP – GAP!! Your NASA Federal Credit Union “Gap” Solution Application Process Preview Application…School Certification…Loan Cycle Important Websites!! Wrap-up and Q&A 2 Credit Union Student Choice © 2014 Agenda

3. 3 Credit Union Student Choice © 2013 Why the “GAP”?

4. 4 Credit Union Student Choice © 2014 So, why “Invest” in College?

5. FAFSA (Free Application for Federal Student Aid) Types of Aid Available FreeScholarships and Grants CheapFederal Direct Loans GapFederal Direct PLUS Loans Gap Private Education Loans 5 Credit Union Student Choice © 2014 How it all (should) begin!

6. Financial Aid Process 6 Credit Union Student Choice © 2014 RECEIVE/ COMPARE around May RECEIVE/ COMPARE around May COMPLETE as early as January 1 COMPLETE as early as January 1 PREPARE as early as possible PREPARE as early as possible Pull together Documents Tax returns W2’s etc. Complete the FAFSA between January 1 and and June 30 NOTE: States and schools have their own unique deadlines Review award letters and compare options: Free Cheap Gap

7. Award Letter also referred to as a financial aid package, contains the cost of attendance and any financial aid offered to the student by the school. Cost of Attendance (C.O.A.) the cost set by the school to cover student expenses. Includes tuition, fees, books, rent, food, misc. expenses, etc.. Financial Aid the offering of scholarships, grants, federal work study, and loans to assist a student in meeting the cost of attendance. COA – EFC = Need – Offered Financial Aid = GAP! 7 Credit Union Student Choice © 2013 Definitions

8. Source: The College Board, Trends in College Pricing 2013, Figure 1 8 Credit Union Student Choice © 2014 College Enrollment and Costs

9. Cost of Attendance (COA) Tuition School Fees Housing/Rent Books Food Transportation Misc Expenses 9 Credit Union Student Choice © 2014 Where Does the Money Go?

10. 10 Credit Union Student Choice © 2013 Your Award Letter

11. Definitions Types of Financial Aid Listed Scholarships and Grants Federal Work Study Program Federal Work Study Program Federal Perkins Loan Federal Direct Loans Federal Direct PLUS Loan Federal Direct PLUS Loan 11 Credit Union Student Choice © 2013 Your Award Letter How Much Do I Really Need Appealing an Award Letter Loan Options The Award Letter

12. 12 Credit Union Student Choice © 2013 By Mail By System By Email Award Letter types

13. 13 Credit Union Student Choice © 2013 Federal Loan – Subsidized $3,500 Federal Loan – Unsubsidized $2,000 School Grant $1,500 State Scholarship$1,000 Federal Work-Study $2,000 Total Award $10,000 Cost of Attendance $20,138 Remaining Need$10,138 University of Success Award Letter Example

14. Reasons to appeal: Change in employment/income Medical bills Divorce Disability/death High consumer debt 14 Credit Union Student Choice © 2013 Appealing your Award Letter

15. Each school will have their own process and procedures. Visit the school’s website for specific instructions on how to appeal. Submit a letter Appointment with FAO Telephone interview 15 Credit Union Student Choice © 2013 Appealing your Award Letter

16. 16 Credit Union Student Choice © 2013 Award Letter Funding Options

17. 17 Credit Union Student Choice © 2014 Theme Options Free, Cheap, and Gap

18. Scholarships and Grants Federal, State, Local Federal Work Study Federal Perkins Loan Federal Direct Loans Subsidized Unsubsidized Federal Direct PLUS Loans Private/Alternative Student Loans 18 Credit Union Student Choice © 2013 Types of Financial Aid

19. Free money from the government, state, and/or institution Does not have to be repaid Grants may have an obligation associated with acceptance. Failure to meet obligation may require grant to be repaid. Awarded based on need or merit Awarded for a variety of reasons: Academics, sports, extra-curricular activities, etc. Check with the Financial Aid Office for additional scholarships that may be available. 19 Credit Union Student Choice © 2013 Scholarships and Grants

20. Verify Are you willing to meet the requirements attached to receiving this aid? Is the scholarship/grant renewable; not just made available for one year, but aid that will be carried over year after year? Compare award letters; different schools will award varying amounts of aid, compare the dollars award to make the right choice for student and family. 20 Credit Union Student Choice © 2013 Scholarships and Grants

21. Follow all instructions Use Reference Letters Highlight Any Community Involvement and Charity Work Include Job History Essays = TEE: Time Energy and Effort Beware of scams! 21 Credit Union Student Choice © 2014 Scholarship Tips

22. 1.Only applying for private scholarships In every state, there are local scholarships that are awarded based on the residency of a student. 41 of 50 states offer (CT, LA, ME, MI, MS, NE, NH, NM, WV) 2.Applying for too few scholarships 3.Not following instructions and other application mistakes 4.Not paying attention to deadlines 5.Looking for Scholarships for only a few weeks 22 Credit Union Student Choice © 2014 Source: StudentScholarshipSearch.co m Top 5 Scholarship Mistakes

23. Free money – kind of! First come – First serve – Financial Need Provides jobs to student with financial need Paid at least minimum wage Jobs are part time, usually on-campus Didn’t receive Work Study? Check with the Financial Aid or Admissions Offices 23 Credit Union Student Choice © 2013 Federal Work Study

24. Loan is in the student’s name, made through the school’s financial aid office Awarded to students with exceptional financial need Maximum annual amount is $5,500 Government pays interest while in school 24 Credit Union Student Choice © 2013 Fixed interest rate of 5% No origination fee Once in repayment, pay school directly Standard repayment term is 10 years Grace period is 9 months Federal Perkins Loan

25. William D. Ford Federal Direct Loan Program Loans are in the students name and funds come directly from the U.S. Department of Education Standard repayment term is 10 years with a 6 month grace period 25 Credit Union Student Choice © 2013 Federal Direct Loans

26. Subsidized Awarded to eligible students based on financial need Government pays interest while in school Fixed interest rate of 4.66% plus 1.073% loan fee* Unsubsidized Awarded to all eligible students, not based on need Students are responsible for interest, may defer Fixed interest rate of 4.66% plus 1.073% loan fee* 26 Credit Union Student Choice © 2013 *First Disbursed between July 1, 2014 and June 30, 2015 Federal Direct Loans

27. Often listed on Award Letter (but not “always”) Interest rate is fixed at 7.21% Bridges the gap between education costs and financial aid Credit based loan made to the biological, adoptive, or in some cases a step-parent of a dependent student for the purpose of meeting the cost of attendance. Origination fee of 4.292% 27 Credit Union Student Choice © 2013 Federal Direct PLUS Loans

28. Limit is the COA less any other Financial Aid Payments begin 60 days after first date of disbursement (can request deferment) No prepayment penalty Dependent students whose parent is denied may qualify for additional Federal Direct Loan limits 28 Credit Union Student Choice © 2013 Federal Direct PLUS Loans

29. Reports in the media of a widespread student debt crisis might be discouraging to someone considering financing a college education In reality, instances of students with excessive debt are rare: 43.1% of students have $10K or less in student loan debt 4.2% of students have debt between $75K and $150K 1.2% have debt over $150K 29 Credit Union Student Choice © 2013 Indebted Students, by Amount Owed Federal Reserve Bank of New York statistics, as cited in The Myth of the Student Loan Crisis, Atlantic Magazine, March 2013. Student Indebtedness

30. Consider: Fixed Costs Flexible Costs Other Income Appeals 30 Credit Union Student Choice © 2013 How Much do you Really Need?

31. 31 Credit Union Student Choice © 2013 Tuition$7,000 + School Fees$1,000 Total Fixed $8,000 Fixed Costs

32. 32 Credit Union Student Choice © 2013 Rent – ($400 X 10) $4,000 Food – ($300 X 10 months)$3,000 Books - ($100 X 10 books)$1,000 Cell Phone - ($50 X 10 months)$500 Transportation - (ex: Bus pass @ $25/mo x 10mos.) $250 Total Flexible $8,750 Flexible Costs

33. 33 Credit Union Student Choice © 2013 Fixed$8,000 Flexible $8,750 Total Costs$16,750 Total Award ($10,000) Remaining Need$6,750 Unmet Need

34. Savings Account Retirement Account 401K Plans Home Equity Loans Credit Cards Tuition Payment Plans Private Loan Options 34 Credit Union Student Choice © 2013 Remaining Need

35. 35 Credit Union Student Choice © 2013 Your NASA FCU “Gap” Solution

36. Line-of-credit structure – Apply once for an entire undergraduate career; borrowers submit an online draw request for additional funds – No annual application – but we conduct and annual review – Minimum Draw: $1,000…Maximum: $75,000 Rates and Fees for NASA Federal Credit Union 36 Credit Union Student Choice © 2014 Underwriting Criteria ApplicantBOR FICOCOB FICOIndexMarginFloorCeilingLate FeeLeewayNSF FeeGMIMin $Max $DTIGuaranty BOR only 750+ n/a LIBOR 3.690% 6.000%18.00%5.00%15 days$20.00$2,500$1,000$75,000TBDYes 730-7493.790% 700-7293.940% 660-6994.430% BOR + COB0/620+ 750+3.690% 730-7493.790% 700-7293.940% 660-6994.430%

37. Low Interest Rates (Based on LIBOR Index + Spread of 3.69% to 4.43%) Floor: 6% Ceiling: 18% No origination or prepayment fees 20-25 year repayment term Deferment/forbearance options available Graduated Repayment 37 Credit Union Student Choice © 2014 Your NASA FCU “Gap” Solution

38. Co-borrower recommended but not required To qualify: student with a co-borrower – Student FICO = 0 or 620+ – Co-borrower FICO = 660+ $2,500 gross monthly income No student loans in default for last 7 years No bankruptcy for last 5 years To qualify: student without a co-borrower – All of the above + 2 years of continuous work history 38 Credit Union Student Choice © 2014 Will I need a Co-signer??

39. Available for nearly 2,000 4-year, not-for-profit institutions participating in Title IV federal student aid programs No origination or prepayment fees 0.25% rate discount for automatic repayment (ACH) Flexible Repayment Options; 20 repayment term Full deferment (maximum of 5 years + 6 month grace) Interest only payments Principal and Interest payments Graduated repayment available 39 Credit Union Student Choice © 2014 Details…Discounts…Repayment Options

40. Forbearance Bankruptcy Death Economic hardship Natural disaster Military mobilization Flexible Repayment Options Full deferment (maximum 5 years + 6 month grace) Interest only Principal & Interest Graduated repayment available 40 Credit Union Student Choice © 2014 “Safety Nets”…

41. 41 Credit Union Student Choice © 2013 Application Process “Preview”

42. 42 Credit Union Student Choice © 2014 To Apply Applicants Visit: www.nasafcu.studentchoice.org or call (800) 322.8816 NASA FCU Application Website

43. Documents needed for processing: Proof of Income Proof of NASA FCU Membership Signed Agreement Signed Application Proof of Identity All of the above required for student and co-borrower 43 Credit Union Student Choice © 2014 What to Expect: Required Loan Documentation

44. 44 Credit Union Student Choice © 2013 Application…School Certification…Loan Cycle

45. Student requests money from lender Lender request Certificati on from School School certifies COA less other aid, enrollment status, good academic standing, etc. Provides lender with disbursement dates. Lender sets up loan for disbursement to the school School reimburses student for determined variable costs Loan Certification Process: between student, lender and school 45 Credit Union Student Choice © 2014 Approved funds are disbursed on date requested by school divisible by number of disbursements. Your Student Choice Solution From $$ Request…to…$$ Disbursement!

46. Loan Certification Process: Loan funds disbursed directly to school Credit Union/borrower does not have control over: – When funds are disbursed to school – When funds are applied to account – When or how disbursement is made to student Always Check Your Financial Aid Office Deadlines! 46 Credit Union Student Choice © 2014 School Certification/Loan Funds Disbursements

47. 47 Credit Union Student Choice © 2014 The Loan Cycle… NASA FCU Co-Branded Site Application & Processing Online via CU website or dedicated toll-free call center Credit Union secures membership with borrower Certification Approved application sent to school FAO for certification and requested disbursement dates Disbursement Funds disbursed directly to the school…Disbursements requested in semester segments…School reimburses student. Servicing Loans serviced by UAS (Credit Union has option to service loans in-house) Lender of Record The relationship is held at NASA FCU

48. Department of Education https://studentaid.ed.gov/ National Center for Education Statistics http://nces.ed.gov/collegenavigator/ FastWeb Scholarship Site http://www.fastweb.com/ College Board’s Net Price Calculator http://netpricecalculator.collegeboard.org/ National Association for College Admissions Counseling http://www.nacacnet.org/Pages/default.aspx NASA FCU https://www.nasafcu.com/ Credit Union Student Choice http://www.studentchoice.org/students/ 48 Credit Union Student Choice © 2014 Important Financial Aid Websites

49. Please contact us with any additional questions. Charlie Hudson chudson@nasafcu.com P: (301) 249-1800 Ext. 267 Center Blog: www.nasafcu/goddardwww.nasafcu/goddard 49 Credit Union Student Choice © 2014 Thank you for Attending…!