Award letter questions?Visit www.studentchoice.org/scholarhelp
College Financing 101:Understanding Your Award Letter
Presented by: Steve WynneAccount Executive – Client Relations and Education
Presented By: Tracie McGetrickStrategic Partnerships
Award letter questions?Visit www.studentchoice.org/scholarhelp
Definitions
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• Award Letter– Also referred to as a financial aid package and contains the cost of
attendance and any financial aid offered to the student by the school
• Cost of Attendance (COA)– The cost set by the school to cover student expenses, which 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
Award letter questions?Visit www.studentchoice.org/scholarhelp
Scholarships – amounts vary – begin as early as 11th grade• Awarded based on need or merit• Awarded for a variety of reasons: academics; sports; extra-
curricular activities; community service; hobbies; writing skills
Resources include• High School Guidance Counselor• On-line Search Engines
– Fastweb.com– Finaid.org– College board.org
• iPhone and Android app (New – as seen on Shark Tank)– Scholly
Scholarships
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Award letter questions?Visit www.studentchoice.org/scholarhelp
• 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!
Scholarship Tips
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Award letter questions?Visit www.studentchoice.org/scholarhelp
Top 5 Scholarship Mistakes
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 weeksSource: StudentScholarshipSearch.com
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We’ve applied…
We’ve been accepted…
Now what?
Financial Aid Overview
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The only way to access most financial aid is by completing
the FAFSA(Free Application for Federal Student Aid)
How Does it All Begin?
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FAFSA - Free Application for Federal Student Aid
• Begin as early as January 1st of upcoming current school term through June 30th of ending school term. Check with your State and college for additional deadlines
• Submit application on-line (99%) at www.fafsa.ed.gov – or through the mail (not recommended)
• Must apply annually
Beware of scams!
FAFSA Process
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• Submit the FAFSA– Online 2-3 weeks to process– Paper 4-6 weeks to process
• Student receives SAR (Student Aid Report)– Summarizes info on FAFSA– Provides EFC (Expected Family Contribution)
• School receives ISIR (Institutional Student Information Record) 10 to 14 days after FAFSA submitted– Summarizes information on student’s FAFSA– All schools listed on FAFSA receive ISIR School uses information coupled
with application to determine student’s financial need and creates an award letter
FAFSA Process
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• School sends Award Letter to student– Financial aid award package– Sent directly to student– Review and decide which awards to accept
• Unmet need– Savings Account– College Savings Plan– Home Equity Line– Credit Cards– 401K– PLUS Loans – Private Loans
FAFSA Process
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YOUR AWARD LETTER
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Award Letter Types
By Mail
By System
By Email
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Types of Financial Aid
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• Scholarships and Grants• Federal Work Study• Federal Perkins Loan• Federal Direct Loans
–Subsidized–Unsubsidized – not an award
• Federal Direct PLUS Loans – not an award
Award letter questions?Visit www.studentchoice.org/scholarhelp
• 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
– Federal Grants based primarily on financial need
• 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.
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Scholarships and Grants
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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.
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Scholarships and Grants
Award letter questions?Visit www.studentchoice.org/scholarhelp
Federal Work Study
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• 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
Award letter questions?Visit www.studentchoice.org/scholarhelp
• 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
Federal Perkins Loan
• 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
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• 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
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Federal Direct Loans
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Subsidized
• Awarded to eligible students based on financial need
• Government pays interest while in school
• Fixed interest rate of 4.66% plus 1.051% 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 1.051% loan fee*
*First Disbursement between July 1, 2014 and June 30, 2015
Federal Direct Loan
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Federal Direct Loan Limits
Freshman $3,500Sophomore
$4,500Juniors & Seniors $5,500
Dependent Student Freshman $5,500Sophomore $6,500Juniors & Seniors $7,500
Independent StudentFreshman $9,500Sophomore
$10,500Juniors & Seniors $12,500
Subsidized Unsubsidized
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Award Letter Example
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Federal Loan – Subsidized $3,500 Federal Loan – Unsubsidized $2,000 School Grant $1,500 State Scholarship $1,000Federal Work-Study $2,000
Total Award $10,000Cost of Attendance $20,000Remaining Need $10,000
University of Success
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How Much Do You Really Need?
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Consider:• Fixed Costs• Flexible Costs• Appeals• Other Income• Tuition Payment Plans
Award letter questions?Visit www.studentchoice.org/scholarhelp
Fixed Costs vs. Flexible Costs
Tuition $8,000+School Fees $1,000
Total Fixed $9,000
Total Flexible $11,000
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Total Flexible Costs $11,000
Rent – ($500 X 10) $5,000
Food – ($300 X 10 months)$3,000
Books - ($200 X 10 books)$2,000
Personal Expenses - ($75 10 months)$750
Transportation - (ex: Bus pass @ $25/mo x 10mos.) $250.00
Total Flexible Costs $8,750
Rent – ($400 X 10)
$4,000Food – ($300 X 10 months)
$3,000Books - ($100 X 10 books)
$1,000Personal Expenses - ($50 X 10 months)
$500Transportation - (ex: Bus pass @ $25/mo
x 10mos.) $250.00
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Flexible Costs
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(New) Unmet Need
Fixed $9,000Flexible $8,750 Total Costs $17,750
Total Costs $17,750Total Award ($10,000)Remaining Need $7,750
Need reduced by $2,250 (or $225 a month)
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Appealing your Award Letter
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Reasons to appeal:• Change in employment/income• Medical bills• Divorce• Disability/death• High consumer debt
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Appealing your Award Letter
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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 Financial Aid Office (FAO)– Telephone interview
Award letter questions?Visit www.studentchoice.org/scholarhelp
Remaining Need
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• $7,750 needed over a 10 month period– $775 month
• Consider other income before borrowing– Part time job– Assistance from family members/friends
• Consider school payment plans– School may offer a monthly payment plan for a small fee
Award letter questions?Visit www.studentchoice.org/scholarhelp
A tuition payment plan is a short-term interest-free solution that takes your school bill and splits it into smaller amounts, payable over a number of months.
• Plans are offered by most schools• Sometimes managed through an outside company• Administered through the campus billing office• Small semester or annual fees will apply• Look on your school’s website or contact the financial aid office for your
school-specific details
Tuition Payment Plans
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Why use a tuition payment plan?• Budget first, borrow wisely - before considering any student loan,
families should utilize current income or savings with a payment plan, or use a payment plan in combination with a student loan
• More time to pay - spreading your tuition payments over several months, you “pay as you go”
• No interest charges – why take out a loan and pay interest if you can use a payment plan!
Tuition Payment Plans
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• Often listed on Award Letter
• 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 4.204%
Federal Direct PLUS Loan
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*First Disbursed between July 1, 2014 and June 30, 2015
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Federal Direct PLUS Loan
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• 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
Award letter questions?Visit www.studentchoice.org/scholarhelp
• Rate• Index – Prime or LIBOR
(difference of about 3%) • Margin - % added to index• Floor – Never go below
• Fees• Origination Fee – 0% to 3%
• Repayment Terms • 10 to 25 years
Private Loan Options
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• Borrower Benefits• What’s in it for me? (W.I.F.M.)
• Co-Borrower Options• FICO, Debt to Income ratio
• Payment Options • Full deferment • Principal & interest• Good faith payments
What to Consider:
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• Line of Credit Structure– $75,000 maximum
• Rates – LIBOR + 3.69% - 4.43%; Floor 6.00%
• No upfront or backend fees• Flexible in-school payment
options– Full deferment (5 years plus 6
mos. Grace)– Interest Only– Principle and Interest
• Borrower Benefits– 0.25% interest rate reduction
for ACH
• Repayment Terms– 20 or 25 years depending on
balance at graduation– Graduated Repayment
Option
NASA Federal Credit Union Student Choice Solution
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Student Indebtedness
• Total student debt has more than doubled from 2005 to 2012 ($463B to $963B)
• 2013 average borrower debt:• 4 year Public = $25,000• 4 year Private = $29,900(includes federal and private loans from borrowers attending not-for-profit institutions only)
• 88% of borrowers have less than $50,000 in total education debt
Source: The College Board, Trends in Student Aid 2013
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Where to Find Information
Start at : NASA FCU Home Page URL
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Where to Find Information
Click over to: CU Student Choice URL
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Thank you for Attending
For more information or for any additional assistance in planning your college career visit:
http://nasafcu.studentchoice.org/
800-322-8816
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Thank you for Attending
Tracie McGetrickStrategic Partnerships, CU Student Choice
Please contact us with any additional questions.
Submit questions to:[email protected]
or visit:www.studentchoice.org/scholarhelp
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