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College Financing 101 An Educational Seminar – Powered by NASA FCU. Presented by: Steve Wynne Account Executive – Client Relations and Education. Presented by: Charles Hudson. Agenda. Introductions Why the “Gap”? - Why the “Investment”? How it all (should) begin!

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college financing 101 an educational seminar powered by nasa fcu
College Financing 101An Educational Seminar – Powered by NASA FCU

Presented by: Steve Wynne

Account Executive – Client Relations and Education

Presented by: Charles Hudson



  • Introductions
  • Why the “Gap”? - Why the “Investment”?
  • How it all (should) begin!
  • Funding Options…FREE – CHEAP – GAP!!
  • Your NASA Federal Credit Union “Gap” Solution
  • Application Process Preview
  • Application…School Certification…Loan Cycle
  • Important Websites!!
  • Wrap-up and Q&A

How it all (should) begin!


(Free Application for Federal Student Aid)

Types of Aid Available

  • Free Scholarships and Grants
  • Cheap Federal Direct Loans
  • Gap Federal Direct PLUS Loans
  • Gap Private Education Loans
financial aid process
Financial Aid Process


as early

as possible

  • as early
  • as January 1
  • around May
  • Complete the FAFSA between January 1 and and June 30
  • NOTE: States and schools have their own unique deadlines
  • Review award letters and compare options:
    • Free
    • Cheap
    • Gap
  • Pull together
    • Documents
    • Tax returns
    • W2’s etc.


  • Award Letter
    • also referred to as a financial aid package, contains the cost of attendance and any financial aid offered to the student by the school.
  • Cost of Attendance (C.O.A.)
    • the cost set by the school to cover student expenses. Includes tuition, fees, books, rent, food, misc. expenses, etc..
  • Financial Aid
    • the offering of scholarships, grants, federal work study, and loans to assist a student in meeting the cost of attendance.
    • COA – EFC = Need – Offered Financial Aid = GAP!

College Enrollment and Costs

Source: The College Board, Trends in College Pricing 2013, Figure 1


Where Does the Money Go?

Cost of Attendance (COA)


School Fees





Misc Expenses


The Award Letter

  • Your Award Letter
  • How Much Do I Really Need
  • Appealing an Award Letter
  • Loan Options
  • Definitions
  • Types of Financial Aid Listed
    • Scholarships and Grants
    • Federal Work Study Program
    • Federal Perkins Loan
    • Federal Direct Loans
    • Federal Direct PLUS Loan

Award Letter types

By System

By Mail

By Email

University of Success

Award Letter Example

Federal Loan – Subsidized $3,500

Federal Loan – Unsubsidized $2,000

School Grant $1,500

State Scholarship $1,000

Federal Work-Study $2,000

Total Award $10,000

Cost of Attendance $20,138

Remaining Need $10,138


Appealing your Award Letter

Reasons to appeal:

  • Change in employment/income
  • Medical bills
  • Divorce
  • Disability/death
  • High consumer debt

Appealing your Award Letter

  • Each school will have their own process and procedures. Visit the school’s website for specific instructions on how to appeal.
    • Submit a letter
    • Appointment with FAO
    • Telephone interview

Types of Financial Aid

  • Scholarships and Grants
    • Federal, State, Local
  • Federal Work Study
  • Federal Perkins Loan
  • Federal Direct Loans
    • Subsidized
    • Unsubsidized
  • Federal Direct PLUS Loans
  • Private/Alternative Student Loans

Scholarships and Grants

  • Free money from the government, state, and/or institution
  • Does not have to be repaid
  • Grants may have an obligation associated with acceptance. Failure to meet obligation may require grant to be repaid.
  • Awarded based on need or merit
  • Awarded for a variety of reasons:
    • Academics, sports, extra-curricular activities, etc.

Check with the Financial Aid Office for

additional scholarships that may be available.


Scholarships and Grants


  • Are you willing to meet the requirements attached to receiving this aid?
  • Is the scholarship/grant renewable; not just made available for one year, but aid that will be carried over year after year?
  • Compare award letters; different schools will award varying amounts of aid, compare the dollars award to make the right choice for student and family.

Scholarship Tips

  • Follow all instructions
  • Use Reference Letters
  • Highlight Any Community Involvement and Charity Work
  • Include Job History
  • Essays = TEE: Time Energy and Effort
  • Beware of scams!

Top 5 Scholarship Mistakes

  • Only applying for private scholarships
    • In every state, there are local scholarships that are awarded based on the residency of a student.
    • 41 of 50 states offer (CT, LA, ME, MI, MS, NE, NH, NM, WV)
  • Applying for too few scholarships
  • Not following instructions and other application mistakes
  • Not paying attention to deadlines
  • Looking for Scholarships for only a few weeks



Federal Work Study

  • Free money – kind of!
  • First come – First serve – Financial Need
  • Provides jobs to student with financial need
  • Paid at least minimum wage
  • Jobs are part time, usually on-campus

Didn’t receive Work Study?

Check with the Financial Aid or Admissions Offices


Federal Perkins Loan

  • Fixed interest rate of 5%
  • No origination fee
  • Once in repayment, pay school directly
  • Standard repayment term is 10 years
  • Grace period is 9 months
  • Loan is in the student’s name, made through the school’s financial aid office
  • Awarded to students with exceptional financial need
  • Maximum annual amount is $5,500
  • Government pays interest while in school

Federal Direct Loans

  • William D. Ford Federal Direct Loan Program
  • Loans are in the students name and funds come directly from the U.S. Department of Education
  • Standard repayment term is 10 years with a 6 month grace period

Federal Direct Loans



Awarded to all eligible students, not based on need

Students are responsible for interest, may defer

Fixed interest rate of 4.66% plus 1.073% loan fee*

  • Awarded to eligible students based on financial need
  • Government pays interest while in school
  • Fixed interest rate of 4.66% plus 1.073% loan fee*

*First Disbursed between July 1, 2014 and June 30, 2015


Federal Direct PLUS Loans

  • Often listed on Award Letter (but not “always”)
  • Interest rate is fixed at 7.21%
  • Bridges the gap between education costs and financial aid
  • Credit based loan made to the biological, adoptive, or in some cases a step-parent of a dependent student for the purpose of meeting the cost of attendance.
  • Origination fee of 4.292%

Federal Direct PLUS Loans

  • Limit is the COA less any other Financial Aid
  • Payments begin 60 days after first date of disbursement (can request deferment)
  • No prepayment penalty
  • Dependent students whose parent is denied may qualify for additional Federal Direct Loan limits

Student Indebtedness

Indebted Students, by Amount Owed

  • Reports in the media of a widespread student debt crisis might be discouraging to someone considering financing a college education
  • In reality, instances of students with excessive debt are rare:
    • 43.1% of students have $10K or less in student loan debt
    • 4.2% of students have debt between $75K and $150K
    • 1.2% have debt over $150K

Federal Reserve Bank of New York statistics, as cited in The Myth of the Student Loan Crisis, Atlantic Magazine, March 2013.


How Much do you Really Need?


  • Fixed Costs
  • Flexible Costs
  • Other Income
  • Appeals

Fixed Costs

Tuition $7,000


School Fees $1,000

Total Fixed $8,000


Flexible Costs

Rent – ($400 X 10) $4,000

Food – ($300 X 10 months) $3,000

Books - ($100 X 10 books) $1,000

Cell Phone - ($50 X 10 months) $500

Transportation - (ex: Bus pass @ $25/mo x 10mos.) $250

Total Flexible $8,750


Unmet Need

Fixed $8,000

Flexible $8,750

Total Costs $16,750

Total Costs $16,750

Total Award ($10,000)

Remaining Need $6,750


Remaining Need

  • Savings Account
  • Retirement Account
  • 401K Plans
  • Home Equity Loans
  • Credit Cards
  • Tuition Payment Plans
  • Private Loan Options

Underwriting Criteria

  • Line-of-credit structure
    • Apply once for an entire undergraduate career; borrowers submit an online draw request for additional funds
    • No annual application – but we conduct and annual review
    • Minimum Draw: $1,000…Maximum: $75,000
  • Rates and Fees for NASA Federal Credit Union

Your NASA FCU “Gap” Solution

  • Low Interest Rates (Based on LIBOR Index + Spread of 3.69% to 4.43%)
    • Floor: 6%
    • Ceiling: 18%
  • No origination or prepayment fees
  • 20-25 year repayment term
    • Deferment/forbearance options available
    • Graduated Repayment

Will I need a Co-signer??

  • Co-borrower recommended but not required
  • To qualify: student with a co-borrower
      • Student
        • FICO = 0 or 620+
      • Co-borrower
        • FICO = 660+
        • $2,500 gross monthly income
        • No student loans in default for last 7 years
        • No bankruptcy for last 5 years
  • To qualify: student withouta co-borrower
      • All of the above + 2 years of continuous work history

Details…Discounts…Repayment Options

  • Available for nearly 2,000 4-year, not-for-profit institutions participating in Title IV federal student aid programs
  • No origination or prepayment fees
  • 0.25% rate discount for automatic repayment (ACH)
  • Flexible Repayment Options; 20 repayment term
    • Full deferment (maximum of 5 years + 6 month grace)
    • Interest only payments
    • Principal and Interest payments
    • Graduated repayment available

“Safety Nets”…

  • Flexible Repayment Options
  • Full deferment (maximum 5 years + 6 month grace)
  • Interest only
  • Principal & Interest
  • Graduated repayment available
  • Forbearance
  • Bankruptcy
  • Death
  • Economic hardship
  • Natural disaster
  • Military mobilization

NASA FCU Application Website

To Apply Applicants Visit: or call (800) 322.8816


What to Expect: Required Loan Documentation

Documents needed for processing:

  • Proof of Income
  • Proof of NASA FCU Membership
  • Signed Agreement
  • Signed Application
  • Proof of Identity
    • All of the above required for student and co-borrower
your student choice solution

From $$ Request…to…$$ Disbursement!

Your Student Choice Solution

Loan Certification Process: between student, lender and school

Approved funds are disbursed on date requested by school divisible by number of disbursements.


School Certification/Loan Funds Disbursements

Loan Certification Process:

  • Loan funds disbursed directly to school
  • Credit Union/borrower does not have control over:
    • When funds are disbursed to school
    • When funds are applied to account
    • When or how disbursement is made to student

Always Check Your Financial Aid Office Deadlines!


Important Financial Aid Websites

  • Department of Education
  • National Center for Education Statistics
  • FastWeb Scholarship Site
  • College Board’s Net Price Calculator
  • National Association for College Admissions Counseling



Credit Union Student Choice


Thank you for Attending…!

Please contact us with any additional questions.

Charlie Hudson

P: (301) 249-1800 Ext. 267

Center Blog: www.nasafcu/nationalacademies