1. Paying for college Anita Baldwin & Brenda Griffith All credit products subject to qualification. © 2010, 2012 Wells Fargo Bank, N.A. All rights reserved. Member FDIC. Please note: this presentation cannot be altered in any way without first contacting Region Marketing. DO NOT DISTRIBUTE. Location Date goes here

2. Quick Tips Financing student education is one of the most important decisions that families make.  Start early. Research your options to make an informed decision.  If you miss a deadline, don’t give up. There are options.  Your influence could impact your child’s/student’s financial future.  Don’t assume that your child/student has the knowledge to take care of everything. 1

3. What are my family’s options? There are many options that families use to pay for college expenses. 2 *Typically offered through the institution  Income  Savings  Financial aid  Tuition payment plan*  529 Plans  Federal student loans  Private student loans  Investments  Home equity  Lines of credit

4. What’s the best option?  The best choice is different for every family and individual situation.  What’s right for you doesn’t have to be just one option— a combination of aid, savings, loans and income might be the right choice.  Some things to consider:  What’s your financial situation today?  Will the amount in savings or your 529 plan cover the entire cost, or will you need more?  How much of the cost do you want to cover, and how much do you expect your child to pay for?  Would dipping into your investments affect your retirement?  Could tapping into your home equity affect your other short-term goals? 3

5. How does financial aid fit in?  Many times, financial aid is a lower-cost option for families.  Start with a visit to the school’s financial aid office. They’re the first source for information on grants, scholarships and aid.  It’s the focus of their office to ensure that your family can pay for school. 4

6. Financial aid myths  Only students with a perfect grade point average get aid.  If your family has a decent income, you won’t qualify for anything.  Only great athletes get grants and scholarships.  There’s so much paperwork involved, it’s not worth the time and effort. 5

7. Financial aid facts Financial aid is money that:  Can come in the form of grants or scholarships that don’t have to be paid back  Could include a Work Study program  Is offered as loans, even to families that have middle to high income 6

8. Getting started 7

9. First things first Complete the Free Application for Federal Student Aid (FAFSA) with your student. Most undergraduates need their parents’ information to complete the form.  Required in order to qualify for federal aid  Complete this as early as possible after your taxes are complete.  The results are automatically sent to the schools that you indicate.  Be sure to get a PIN before you start—one for your child and one for you—it’s an identification method and can be obtained at pin.ed.gov.  Find the form at fafsa.ed.gov. 8 Note: Check with the financial aid office for additional forms or applications that you and/or your child may need to complete.

10. The FAFSA online 9

11. The award process  Watch for the Student Aid Report, this report summarizes the results of the FAFSA.  From here, each school where your child is accepted will send an award letter. It will show grants, work-study, and federal loans.  Compare awards! Not all financial aid packages are the same. Some schools might have additional grants or scholarships. Check with the school to see if your child can qualify for the same aid every year, and understand the full picture of the future cost of education at each school.  Remember, you don’t have to accept everything. Start with the lowest-cost options. 10

12. Expected family contribution Most undergraduate students are considered to be ‘dependent’ when financial aid is calculated—even if you don’t still claim them on your taxes. What this means to you:  Based on your family’s income and other factors, parents are expected to contribute a percentage of college costs.  The student may take a secondary responsibility in paying for college, in the results of aid calculation. Want to know if your student will be considered as a dependent? Visit fafsa.ed.gov which has a quick worksheet to determine dependency status. 11

13. Types of aid 12  Don’t have to be repaid  Beware of scams— you should never have to pay to do a scholarship search. Find details on finaid.org and fastweb.comfinaid.orgfastweb.com  Awarded based on financial need and/ or academic achievement  Don’t have to be repaid  Some are federally funded and others are state programs  Some institutions have their own private grant programs  Based on financial need  Allows students to earn income working part-time  Can work either on or off-campus ScholarshipsGrantsThe Federal Work- Study Program

14. What federal loans are available? 13  Need-based  Low interest rates  Fixed interest rates  Government guaranteed  Qualify for unsubsidized regardless of family income  Fixed interest rates  Cover the cost of education  Not need-based Federal Perkins Loans Federal subsidized and unsubsidized loans Direct PLUS Loan for parents and graduate students Federal Direct Loans

15. How much will college cost?  When planning how much to borrow, consider the following costs:  Tuition & fees: varies by school  Housing: dorm room or rent  Meals: cafeteria or groceries  Books and supplies: buy used textbooks to save  Transportation: the bus or parking pass and gas (Student loans cannot be used for the purchase of a car)  Personal expenses: laundry, toiletries, cell bills, etc.  Consider inflation on tuition and living expenses when calculating the full cost of education. 14

16. Estimate before borrowing  If you decide to borrow for the benefit of your child or if they are borrowing on their own, you’ll want to consider repayment.  No one wants a surprise from that first billing statement.  Use an online loan calculator to see how much the monthly payments will be  Pay attention if a loan has deferred payments. What is borrowed now may accrue interest while the student is in school; interest is normally capitalized (added to the balance) at repayment.  If you or the student can afford to, paying the interest or even part of the principal balance while he or she is in school is a great way to reduce their debt load.  Be realistic—consider your child’s estimated income versus their estimated monthly payments. Ideally, student loan payments should be 10 percent or less of net monthly income. 15

17. Timeline  As soon as possible after January 1, file the Free Application for Federal Student Aid (FAFSA) at fafsa.ed.gov (don’t forget to get a PIN).  Remind your child to register for advanced placement tests.  Help your child complete scholarship applications.  Watch for the Student Aid Report (the response from the FAFSA application). JanuaryFebruaryMarch 16

18. Timeline  Compare financial aid awards  Look for additional funding if aid doesn’t cover the cost  Make sure your child’s final transcripts are sent to the school that they will attend  If your child has a summer job, remind them to save money! AprilMaySummer 17

19. What if financial aid isn’t enough? Private student loans  When federal funding and other sources of aid aren’t enough, you may want to consider a private student loan.  Private loans vary by lender, but they typically offer:  Credit based approvals  Variable interest rates  Generous borrowing limits  Deferred repayment 18 Note that most students will need a qualified cosigner to qualify for a private student loan.

20. More information for students and parents 19  Covers the basics of good money management and the skills you need to create a brighter financial future handsonbanking.org Hands on Banking ®

21. Any questions? Thanks for your time today. Presenter Name More information: studentaid.ed.gov fafsa.ed.gov anycollege.com collegenet.com fastweb.com studentaid.ed.gov fafsa.ed.gov anycollege.com collegenet.com fastweb.com 20