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Presented by: F³E Foundation for Financial Education www.f3eonline.org. Financial Preparation for College The Myth of ‘Financial Aid’. In the Beginning…. (But hopefully, not ‘As it now and ever shall be’). Financial Aid. Scholarships Loans Campus Employment. Sources. Scholarships

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presented by f e foundation for financial education www f3eonline org
Presented by:

F³EFoundation for Financial Education

www.f3eonline.org

Financial Preparation for CollegeThe Myth of ‘Financial Aid’

in the beginning
In the Beginning…

(But hopefully, not ‘As it now and ever shall be’)

financial aid
Financial Aid

Scholarships

Loans

Campus Employment

sources
Sources
  • Scholarships
  • Loans
  • Campus Employment
  • College Catalog
  • Financial Aid Office
  • At Cafeteria, Library, etc.
now sources
Now?? Sources
  • Scholarships
  • Loans
  • Campus Employment
  • www.finaid.org
  • www.finaid.org
  • Computer Programmer
  • River Rafting Guide, etc.
financial aid s purpose
Financial Aid’s Purpose

-Help pay for college

Now

-At many private colleges, attract more ‘Better’ students

Then

better students
‘Better’ Students??

-Higher Grades, SATs, etc.

-Diverse (Geographic, Ethnic, Interests, Skills)

-Ability to Pay (non-need based)

non need financial aid
Non-Need Financial Aid

-Provided from college’s own sources

-Fills seats and/or attracts ‘Better’ students

need based financial aid
Need-Based Financial Aid
  • EFC (Expected Family Contribution)
  • Based upon FAFSA formula

(Free Application for Federal Student Aid)

  • -Measures Your Income/Assets

(But Not Your Debt)

efc example
EFC Example

Married, 45-year-old couple

Two kids (14 and 17)

Total income (2 salaries): $100,000

Non-retirement savings: $20,000

Annual EFC each college year?

$19,000

who pays
Who Pays?

How much?

Where does the money come from?

sources of money
Sources of Money

-Your Hard Earned Money (YHEM)

-Other People’s Money (OPM)

slide15
OPM

X

X

X

YesNo

  • Scholarships
  • Loans
  • Work
slide16
YHEM

Three Sources:

  • Past (Assets)
  • Present (Salaries, Dividends, Interest)
  • Future (Loans)
what s the myth of financial aid
What’s the Myth of Financial Aid?

But it’s not….

Families believe Financial Aid is about how they pay for college

financial aid is about how
Financial Aid is about how…
  • Colleges Pay for their part of Cost Of Attendance (COA)
  • Often with YHEM

- Loans

- Work

financial aid is not about
Financial Aid is NOT About
  • How families pay for ‘Their Costs’ (EFC)
  • It is about how colleges cover their share…if any. (Sometimes, EFC exceeds total cost.)
want proof
Want Proof?

Ask Financial Aid Officers these three Questions:

1. What’s the Income Limit for Student Loan Interest Deduction?

2. Explain Hope Scholarship/Lifetime Learning Credits?

3. Difference between Mutual Funds and Annuities on FAFSA? (federal methodology)

to repeat
To Repeat…

But it’s not….

Families Believe Financial Aid is about:

How They Can Pay for College

families need advice
Families Need Advice
  • Financing Their EFC
  • Average Years to Graduate:

-’Publics’: 28% four-year graduation rate

-’Privates’: 67% four-year graduation rate

  • Non-Need Scholarships

(ex: SAGE TuitionRewards)

families need college funding advice
Families Need College Funding Advice

‘College Funding’:

How to Pay for What YOU Have to Pay For

sage advice
‘SAGE’ Advice
  • Save / Invest Now!
  • Review Current / Projected Family Finances
  • Create a College Funding Plan
slide28

If necessary:

Seek help…

good luck
Good Luck!

The Foundation for Financial Education

info@f3eonline.org

www.f3eonline.org

1-240-499-0390