Vuefolio Seminar on Paying for College - Sunnyvale 2/21/2015

www.vuefolio.com

www.vuefolio.com

PLAN YOUR HIGH SCHOOL STUDENT’S

COLLEGE FINANCES

SUNNYVALE COMMUNITY CENTEROindrila Ray

[email protected]

Vuefolio is a SEC Registered Investment Adviser

Do not distribute without permission

mailto:[email protected]

www.vuefolio.com

Disclaimers


• All materials, graphs and analysis are solely for educational purposes.

• This is not a pitch for any investment product.

• Please do not consider this as financial or investment advice.

• We are not tax lawyers or accountants.

• We do not represent nor endorse any college, educational institution or

any funds that may be mentioned in the presentation.

www.vuefolio.comDo not distribute without permission

As PARENTS,

we try to SUPPORT our CHILD’s

ASPIRATIONS and EFFORTS

www.vuefolio.com

College Desirability, Aspiration and Expense


Cost of Attendance: Narrow band.

Mostly Need blind. Most offer only

need based aid.

Wide spectrum of cost.

Mostly Need sensitive.

Wide range of aid.

Different cost of

attendance for residents

and non-residents. Need

blind for residents.

Other

Private

Colleges

Elite

Private

Colleges

www.vuefolio.com

Cost of Attendance: Snapshot


Elite Private College: Dream schools

Flagship Public Colleges:

Dream, Reach and Safety Schools

www.vuefolio.com

Cost of Attendance


Does everyone pay these

prices?

www.vuefolio.com

Cost of Attendance


NO!

Different families may pay

different amounts.

www.vuefolio.com

Your Price Tag for College


Your Family Income

# of kids attending college

Assets (private colleges

consider your home equity)

Financial Aid available

Your “Actual Cost of College” or Net Price depends on:

www.vuefolio.com

Financial Aid


Need based Aid

• Income

• Assets

• Family profile

Merit Aid

• GPA

• Leadership

• Sports, etc

Types of Financial Aid

www.vuefolio.com

Financial Aid


Federal Grants State Grants Institutional Aid

Federal Student Loans

Need based Aid


Grant By College Type

Source: College Board “Trends in Student Aid” 2014

www.vuefolio.com

Takeaways


• More institutional aid is available in Private Colleges.

• Rule of thumb: Elite Private Colleges have the most institutional grant aid.

• Rule of thumb: Elite Private Colleges have v. low acceptance rates.

• Research institutional grant aid at other private colleges.

• Don’t forget Public Colleges.

• Federal and State grants phase out by $100,000 family income.

www.vuefolio.com

To get financial aid


Free Application for Federal Student Aid (FAFSA)

CSS Profile

Institution’s own Aid Form (some private colleges only)

Need to file

www.vuefolio.com

Merit Aid Facts


• Elite private colleges do not offer merit aid.

• Most merit aid is available at 2nd and 3rd tier private colleges.

• Limited number of merit aid available at public universities.

• UC Regents scholarship: top 1-2 % entering freshman.

• Some state universities have more merit aid as compared to others.

Even for out of state students.

• Some colleges may require the student to file FAFSA and CSS for

merit aid.

www.vuefolio.com

First Year Merit Aid: Private Colleges


Private CollegeCost of

AttendanceAdmission

RateFinancial Aid

Avg. Merit Grant

Vanderbilt $62,970 13.0% Need + Merit $18,797

Northwestern $65,844 15.0% Need + Merit $2,740

Johns Hopkins $64,679 17.0% Need + Merit $32,379

Rice $56,415 17.0% Need + Merit $20,132

Georgetown $62,000 17.0% Need Based -

Harvey Mudd $65,200 19.0% Need + Merit $8,275

USC $64,694 20.0% Need + Merit $20,752

Wellesley $62,088 29.0% Need Based -

Boston College $62,822 32.0% Need + Merit $32,461

NYU $66,000 32.0% Need + Merit $26,202

Carnegie-Mellon $63,822 40.0% Need + Merit $7,053

Only 10-20% of students actually get merit aid.

www.vuefolio.com

Merit Aid : Private Colleges


Most of the Merit Aid is available in tiers below the Elite Private Colleges

Source: College Board “Trends in Student Aid” 2014

Merit Aid/other aid almost more

than need based aid

www.vuefolio.com

How can families in Bay Area get Financial Aid?


• Demonstrate need based on income …before application try out the college’s online

net price calculator.

• Multiple kids in college at the same time.

• Apply to Private Colleges which offer Merit Aid … research those colleges.

• Some Out of State Public Colleges have Merit Aid … find those colleges.

• Many colleges will send offers even before application based on SAT and other

scores.

• External Scholarships.


How do most families

working in tech, software, medicine, finance

pay for college?

www.vuefolio.com

How Parents Pay For College


Savings and Investments

Current Income

Loans

www.vuefolio.com

Savings and Investments


529 PlansInvestment/

Savings Accounts

Custodial Accounts

(child’s savings)ESPP

Money from retirement accountsRoth IRA

www.vuefolio.com

Loans



Students borrow, not parents

Parent Plus Loans

Home Equity Loans/Line of Credit

Private Education Loans

Loans against 401k accounts

www.vuefolio.com



Subsidized

• Need based

• Interest accrues after graduation

• Annual Limit

Unsubsidized

• Not need based

• Interest starts accruing immediately

• Annual Limit

www.vuefolio.com

Paying for College: Federal Student Loan


Pros

Student has a responsibility towards education and employment

Grace period of 6 months after graduation for repayment

Income based repayment of loans

Does not affect credit score. Does not put parent on the hook

Cons

It’s a loan. Student debt is a problem. Can affect later financial decisions

Cannot discharge loan in bankruptcy.

Annual and maximum limits. Max limit covers just 1 yr at a UC!

Have to file the FAFSA every year to get loans for all years of study

www.vuefolio.com

Paying for College: Pros and Cons


Visit https://www.vuefolio.com/

To learn about PROS and CONS

529 PlansInvestment/

Savings Accounts

Custodial Accounts

ESPP

Roth IRA


Parent Plus Loans

Home Equity Loan/Line of Credit

Private Education Loans

Loans against 401k accounts

https://www.vuefolio.com/

www.vuefolio.com

Choosing a college …


College

& Major Acceptance

Academics

Extra Curricular

Personality Fit

Financials

ROI: Employability

after graduation


Thank you for your time.

To learn more, check out our website

https://www.vuefolio.com

Disclaimer: Vuefolio does not render legal, accounting, or tax advice. This presentation is solely for informational purposes and is not a

solicitation or an offer to buy any security or instrument or to participate in any trading strategy. Vuefolio is not responsible for any

college costs, financial aid, student or any other kinds of loans, investment performance of the 529 state plans. Any data quoted

represents historical information. Any past performance quoted is no guarantee of future results. Vuefolio is a SEC registered Investment

Adviser.

Economy & Finance

Vuefolio Seminar on Paying for College - Sunnyvale 2/21/2015