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Don’t Let Your Reality Check Bounce! What Parents and Students Need to Know About Saving and Financial Aid for College A Presentation of the Indiana Student Financial Aid Association Careers of the Future Increasingly high-skilled, information-based. More diverse, smaller workforce.

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Don t let your reality check bounce l.jpg

Don’t Let Your Reality CheckBounce!

What Parents and Students Need to Know

About Saving and Financial Aid for College

A Presentation of the Indiana Student

Financial Aid Association

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Careers of the Future

  • Increasingly high-skilled, information-based.

  • More diverse, smaller workforce.

  • Average worker will hold 9 different positions by age 34.

  • Technology provides less traditional work environments.

U.S. Dept. of Labor

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Potential Returns on Postsecondary Education!

  • Understand and appreciate more

  • Achieve higher earning potential

  • Expand your talents and abilities

  • Create greater job security

  • Make more informed decisions

  • Cope with change

  • Become a Lifetime Learner

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Invest in yourself

  • Even with rising costs, college is still a good investment.

  • Studies show college graduates can earn an average of 75% more than high school grads.

  • Postsecondary education pays off over a lifetime.

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Career Earnings by Education Level

Data is from an analysis by the Employment Policy Foundation of data from the Bureau of Labor Statistics. The complete press release is available at

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Expect a Financial Return on Your Investment!

  • Unemployment Trends (2000 Bureau of Labor)

    • No HS Diploma 7.9%

    • HS Diploma 3.8%

    • Some College 3.0%

    • College Degree 1.5%

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After High School, Then What?

  • Employment

    • Apprenticeships

    • On-the-job training

  • Military

    • Training/experience

    • Saving for college

  • Postsecondary Education

    • Vocational/Technical

    • Associate Degree

    • Baccalaureate

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Postsecondary Education

  • Degrees/Certificates

    • 9 to 18 month certificate programs

    • Two-year associate degrees

    • Four to five-year baccalaureate (bachelor’s) degrees

    • Postgraduate degrees

  • Institutional Types

    • Public, private, and career schools

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What can my child do to gain a competitive edge?

  • Set goals.

  • Make school attendance a priority.

  • Review and improve scholastic standing.

  • Take the right classes. (Core 40)

  • Develop talents and expand interests.

  • Become involved in school and community activities.

  • Explore Advanced Placement classes.

  • Limit hours worked while in school.

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Paying for College:A Combination of Strategies

  • Savings (never too early/late to start)

    • Parents

    • Student

  • Current Income (while in college)

    • Parents

    • Student (summer job, on/off campus jobs)

  • Future Income (after college)

    • Parent Loans

    • Student Loans

  • Scholarships, Grants, and Fee Waivers

    • Merit based: academic, talent, other criteria

    • Need based: must apply for financial aid

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Savings Strategies

  • Estimate the cost of postsecondary education.

  • Establish goals for savings.

  • Save systematically and regularly.

  • Diversify.

  • Explore plans with educational benefits resulting from purchases.

  • Invest windfalls rather than spend them.

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Estimating College Costs

Example of budget for Indiana resident, living on campus at a public college:

9-month academic year

Tuition/fees $4,100

Room/board $5,600


Books/supplies $ 790

Transportation $ 750

Personal expense $1,643

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Coverdell Education Savings Account (ESA)formerly known as Educational IRA (EIRA)

  • Contributions are not excludable from AGI

  • Earnings accumulate tax-free

  • Distributions are not taxable

  • Maximum contribution of $2000/year until beneficiary reaches age 18

  • Interest and tax-free withdrawal must be used or transferred by beneficiary’s 30th birthday

  • Cannot use with Hope/Lifetime tax credits.

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College Choice 529 Investment Plan

  • Tax-deferred growth

  • Qualified withdrawals tax-free for Federal and may be tax-free for Indiana residents.

  • No income limits

  • No age limit on beneficiary

  • Investment options include age-based and custom portfolios

  • Anyone over 18 can open account regardless of state of residency

  • Minimum initial contribution: $50

  • Additional contributions: $25 or more

  • Monthly ACH deductions from your bank account are available

Call 1-866-400-7526 for enrollment kit.

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Investment Guidelines

  • Start as early as possible. (But it is never too late!)

  • Begin with an aggressive strategy.

  • Become more conservative as college enrollment approaches.

    • Choose investments according to number of years until enrollment and risk tolerance.

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Be Aware of Risks

  • Extremely high risk

    • Stock options

    • Futures

  • High risk investments

    • Individual stocks

    • Some mutual funds

  • Low risk investments include

    • Some mutual funds

    • Bonds

    • U.S. Savings bonds, state savings plans, EIRA

    • Money market and certificate of deposit

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Options for your student

  • Consider college payment plans.

  • Investigate two-year college options.

  • Work in exchange for housing/etc.

  • Plan to complete in four years.

  • Attend part-time.

  • Consider employment.

  • Explore Military.

    • ROTC.

    • Montgomery G.I. Bill.

  • Investigate co-operative education.

  • Consider internships.

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Financial Aid: One of Many Strategies

  • Sources

    • Federal Student Aid Programs

    • Indiana Student Aid Programs

    • College/University Funds

    • Private Organizations, Business, and Industry

  • Types

    • Scholarships, grants, and fee waivers (fee remission)

    • Student Loans (for students and parents)

    • Student Employment or Work Study Note: Some scholarships have strings attached and may become loans if conditions of the award are not met.

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Indiana Funding for Higher Education

  • Twenty-First Century Scholars Program

    • Students enroll in 7th or 8th grade.

    • Receive tuition assistance (up to 30 semester hours per year) at eligible Indiana colleges or universities for 4 years.

  • Need-based Grant Programs

    • Frank O’Bannon Grant Program (formerly the Indiana Higher Education Grant Program)

      • Higher Education Award

      • Freedom of Choice Award

    • Minority Teachers and Special Education Scholarship

    • Nursing Scholarship (tuition/fee specific)

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Other Indiana Assistance

  • Hoosiers Scholars

    • One to three scholarships awarded by each eligible high school to academically talented college-bound seniors.

    • One-time $500 award at eligible Indiana institution.

  • Fee Remission at State Colleges/Universities

    • Child of Veteran & Public Safety Officers

      ICPAC Career & Education Hotline 1-800-992-2076 http://icpac.indiana

      Indiana funding for higher education:

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Federal Student Financial Aid

  • Federal Pell Grant

  • Campus-Based Programs

    • Federal Supplemental Educational Opportunity Grants

    • Federal Work Study

    • Federal Perkins Loans

  • Direct and FFEL Stafford Loans (for students)

  • Direct and FFEL PLUS Loans (for parents) 1-800-4-FED-AID (1-800-433-3243)

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Steps To Remember

  • Review your scholastic standing.

  • Be aware of Core 40 courses.

  • Develop interests/skills.

  • Estimate cost of education.

  • Estimate savings needed and begin savings program.

  • Start scholarship search NOW!

  • Estimate the amount of cost to be covered by current income (student and parent income).

  • Estimate the amount of cost to covered by student loans.

  • Know all application deadlines and procedures.

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Web Browser Bookmarks

  • Scholarship search

    • Financial Aid Information Page

      Allows access to FastWeb and other scholarship databases

    • College Board

  • College and career planning

    • Indiana Career and Postsecondary Advancement Center -

    • Mapping Your Future