College Costs, Financial Aid & Savings Options for Parents of High School Students

1. College Costs, Financial Aid & Savings Optionsfor Parents of High School Students Presented by: The NHHEAF Network Organizations’ Center for College Planning

2. A Free Resource for New Hampshire Students and Parents The Center for College Planning • Free Financial Aid Counseling • College Planning Library – Concord • Monthly e-newsletters • Special Events and Programs • Presentations to NH K-12 schools

3. Potential Cost of Collegein New England 2010-2011 average amounts for New England schools provided by CollegeBoard. These numbers reflect 4 years of college tuition, room & board and reflect a 5% annual increase.

4. Cost of College (2011-2012)

5. Cost of Attendance • Billable Expenses • Tuition and Fees • Room and Board • Non-Billable Expenses • Books and Supplies • Equipment (i.e. computers, software) • Transportation • Miscellaneous Personal Expenses • Loan Fees • Study Abroad Costs (when applicable) While the bill from the college will only include the “Billable Costs” families need to budget for the additional expenses students will have during their year at school.

6. Financial Aid Philosophy: While financial aid can make college more affordable, parents & students are expected to take primary responsibility for paying for post-secondary education. Understanding Financial Aid • FAFSA • Free Application for Federal Student Aid • www.fafsa.ed.gov • CSS Profile • www.collegeboard.org • Institutional Form • College’s financial aid page

7. Types Of Aid • Gift Aid: Grants and Scholarships - Need-based (determined through the financial aid process) - Merit-based (determined through the admission or recruitment process) • Self-help Aid: Loans and Employment - Need-based

8. How Financial Aid Is Awarded • Cost of Attendance (COA) • The amount a school has budgeted for a student’s tuition, room and board, books, fees, supplies and any related expenses. • Expected Family Contribution (EFC) • The amount, as determined by federal methodology, that represents your family’s ability to pay for one year of college. COA 45,000 - EFC 16,000 Eligibility 29,000* * It is important to note that while a student may be eligible for this amount, there is rarely a guarantee that the student will actually receive this amount.

9. Award Letter Sample • Cost of Attendance 45,000 • Expected Family Contribution -16,000 • Eligibility for Financial Aid 29,000 • Financial Aid Package • - University Grant 10,500 • - Presidential Scholarship 2,500 • - Federal Student Loan 5,500 • - College Work Study 1,500 • Total Award 20,000 Gap 9,000 + EFC 16,000 + Federal Student Loan 5,500 + College Work Study 1,500 Total Family Share 32,000 Eligibility 29,000 - Financial Aid 20,000 Gap 9,000

10. EFC Calculators Visit: www.fafsa4caster.ed.gov To find out what your EFC would be today!

11. Davis Family Dad is 50, Mom is 48 Two Children Have a combined income of $95,000 Saved $1,000 for college expenses How Saving Affects Your EFC Myth Saving for college will negatively impact a family’s financial aid eligibility. • Smith Family • Dad is 50, Mom is 48 • Two Children • Have a combined income of $95,000 • Saved $60,000 for college expenses • EFC = $16,391 EFC = $17,023

12. Value of Saving Saving Borrowing Borrowing $13,000 at a 7.9% interest rate equals a monthly payment of $157 for 10 years with a total payback of $18,844 Saving $200 monthly for 5 years (total invested is $12,000) at a 3% interest rate will yield a total of $12,961 Total Savings of $5,844 Saving any amount towards college can decrease the total borrowed and amount owed per month.

13. Impact of Popular Savings Vehicles on the FAFSA Parent’s Asset (Maximum Assessed is 5.64% above Asset Protection Allowance for Parents) Student’s Asset (Assessed at 20% with no Asset Protection Allowance for Students) UTMA/UGMA (Uniform Gift to Minor/Uniform Trust to Minor) Savings Bonds (if student is the primary owner) • 529 Plans • Coverdell ESA • Savings Bonds (if parent is the primary owner) Parent Asset Protection Allowance Age 45Age 60 Two parents - $42,900 Two parents - $59,700 One parent - $14,900 One parent - $20,400

14. Net Price Calculators

15. How do most families pay for college? Savings Current Income Tuition Payment Plans Federal/Direct PLUS Loans Private Student Loans Don’t Let the Numbers Scare You! College Can Be Affordable • About Direct PLUS Loans • Fixed rate of 7.9% • 4% loan origination fee • No set limit – determined by the cost of education less financial aid received by the student

16. Applying For Scholarships • National Search • www.fastweb.com • www.collegeboard.org • Local Search • HighSchool/Guidance Department • Employers & Professional Associations • Library & Community Organizations • www.nh93.com • www.nhcf.org • www.iamcollegebound.org • Note: • Avoid Scholarship Scams! • Find out each college’s policy on the treatment of outside scholarships.

17. Questions? The NHHEAF Network Organizations’ Center for College Planning 1.888.7.GRADUATE x119 www.nhheaf.org collegeplanning@nhheaf.org