FAFSA

FAFSAPlanning For College Wisely

What is FAFSA?

• 1. This is aid from the federal government to help pay for college.

• 2. It is intended to make up the difference between what your family can afford to pay and the cost of college.

• 3. All families are expected to contribute something to the cost of school. This is the Expected Family Contribution-EFC

• 4. More than ½ of the students in college currently receive some sort of aid.

Types of Aid

•1. Loans

•2. Grants

•3. Scholarships

•4. Work Study

What are Loans?

• ~ Loans are borrowed money from the government that must be repaid after the student has graduated from college.

• ~ This type of loan has a much lower interest rate than what you would borrow from a bank or private loan lender.

• ~ There are 2 types of loans. Most common for undergraduates is a Federal Perkins Loan and a Federal Direct Loan.

Specific Loans

• ~ Direct Subsidized Loan: 3.86 % fixed rate is the best choice for students. During college the interest is paid by gov’t. You’ll pay after you graduate. This is a need based loan.

• ~ Direct Unsubsidized Loan: 3.86 % rate but this loan will gain interest while in college.

• ~ There is a 1.051% fee on all direct loans

• ~ Federal Perkins Loans: 5% rate are for students with great financial need with a 9 mo. grace period. Not all colleges participate in this type of aid.

What are Grants?

• ~ This a a gift of money that a student does not have to pay back to the government. It is given to students with great financial need.

• ~ 3 Types: Federal, State, & College• ~ Federal Pell Grant: up to 12 semesters• ~ WI Higher Education Grant/WI Tuition Grant

• www.heab.state.wi.us

• ~ Individual colleges have access to award grant money to help tuition costs

Scholarships

• 1. State sponsored scholarships such as: the All State Scholar award

• 2. Colleges award scholarships based on academic, athletic, or other talent criteria.

• 3. Community scholarships such as the Elks, Kiwanis, and PTA organizations.

• 4. Some private affiliations such as: members of clubs, employers, or union organizations.

Work Study?

• ~ This is an opportunity to gain employment on your college campus.

• ~ The federal government provides the money to the campus for student employment.

• ~ This is an opportunity to pay for regular occurring expenses during the school year.

• ~ It is a great way to get connected to campus resources right away.

When & how do you apply?

• ~ High school students fill out the application in January of their senior year.

• ~ This is an electronic application and can be accessed any time after January 1st. http://www.fafsa.gov

• ~ This is based on the idea all students should have access to higher education regardless of how much money you have.

What are the costs?

• 1. Tuition and Fees, which includes:• Housing• Meal Plan• Transportation• Books & Supplies• Miscellaneous Living Expenses

• This all encompasses Cost of Attendance (COA)

Budgeting

• 1. Be mindful of the costs and your ability to pay back your loans after you graduate.

• 2. All colleges have a Net Price Calculator to help estimate your cost of attendance. This helps to create your budget.

• 3. Use a financial aid planner tool to help with this. Allows you to see the whole process of borrowing and how you are responsible for it.

Tools to use for budgeting

• 3 options to estimate federal aid for cost of attendance• 1. The Net Price Calculator: this is an

option on all college/university web sites

• 2. FAFSA4caster• 3. http://studentaid.ed.gov

• Tips for college preparations and career search

• The Budget Calculator• Student loan management & repayment

tools

Borrowing Tips

• ~ Think of the entire cost of school in terms of monthly payments.

• ~ Borrow only what is needed for direct educational expenses.

• ~ Consider the salary you would take home and who much you could afford to pay back monthly.

• ~ Always check with your school’s financial aid department before pursuing private loans.