2. FAFSA Planning For College Wisely

3. 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.

4. Types of Aid • 1. Loans • 2. Grants • 3. Scholarships • 4. Work Study

5. 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.

6. 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.

7. 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

8. 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.

9. 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.

10. 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.

11. 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)

12. 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.

13. 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

14. 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.