Paying For College

1. Paying For College Presented By: NOVA’s Financial Literacy Program

2. College Pays, But How Do You Pay For College? “An investment in knowledge always pays the best interest.” - Benjamin Franklin

3. What Are Sources of College Funds? Source: How America Pays for College 2018, from Sallie Mae and Ipsos.

4. What Expenses Will You Have in College? Tuition Books Supplies Transportation Room and Board Other Fees Personal Expenses + Estimated Expenses

5. Apply for Financial Aid! You may qualify for aid for your college & living expenses! Types of Financial Aid Grants– Free money based on financial need Scholarships – Free money based on need and/or merit, competitive, requirements vary Work-Study – Earn money toward college expenses through need-based work-study employment Student Loans – Low interest rate, may defer payments while enrolled in at least six credits

6. How to Apply for Financial Aid • Students create a FSA ID. • Parents of dependent students create a FSA ID. • 2) Complete the FAFSA at FAFSA.GOV • Reapply each year starting October 1st • (almost a year before the following academic year begins) • Promptly submit any items that may be requested by the Financial Aid Office. • More info is available at https://studentaid.ed.gov.

7. How to Apply for Financial Aid Obtain your FSA ID and Submit the FAFSA at FAFSA.GOV

8. Follow Up with Your College • Promptly submit any items that may be requested by the Financial Aid Office. • Register for classes. • Ensure that your financial aid is enough to cover your balance by your college’s payment deadline.

9. Apply for Scholarships • Where should you begin your scholarship search? • Your High School Counseling Office/College Center • Your Academic Department at Your College • Financial Aid Office at Your College • Local Organizations • Apply for external scholarships through free websites like: • www.fastweb.com • www.scholarships.com • www.finaid.org/scholarships • Information on grants and scholarships for Virginia Residents: • http://www.schev.edu/index/tuition-aid/financialaid/state-student-aid/undergraduate-financial-aid-programs

10. What makes a good scholarship essay? • Tell Your Story • Sales Pitch • Good Grades • Volunteer Experience • Extracurricular Activities • Success Despite Obstacles • Educational and Career Goals • Statement of Financial Need (if applicable) • How you’ll Benefit from the Money • Close with a “Thank You” Remember, scholarships are competitive, write a good essay and apply for as many as possible!

11. Accept Student Loans if Necessary Only borrow what you need and can afford to repay! Complete the Direct Loan Master Promissory Note (MPN) and Entrance Counseling (EC). Most colleges require the MPN and EC to be completed athttps://studentloans.gov.

12. Federal Direct Loan Annual Borrowing Limits At community colleges, students may only potentially receive Federal Direct Loans at the Freshman and Sophomore levels.

13. Responsible Borrowing Consider low-rate federal student loans with flexible repayment options before credit cards and private loans. Contact your loan servicer if you have trouble making loan payments to discuss your options to avoid default. Average debt of bachelor’s degree recipients is about $37,000. What would be the estimated monthly loan payment based on the standard repayment plan with a 5.05% interest rate? $393.35 per month for 10 years

14. Work-Study and External Employment Ask the Financial Aid Office if you qualify for work-study. Other opportunities may be available through your Student Employment Office or Career Center. Working off-campus while going to school can also help cover your educational expenses. If employed, consider limiting your schedule accordingly: 16 hours of work per week – Take a maximum of 12-15 credits 25 hours or work per week – Take a maximum of 8-11 credits 40 hours of work per week – Take a maximum of 7 credits

15. Financial Aid Reminders Funding for some financial aid programs is limited. Apply early! Pell eligibility is capped at the equivalent of 12 full-time semesters. Total Direct Loan borrowing is capped at $31,000 for dependent undergraduates with a maximum of $23,000 in subsidized loans. Meet the Satisfactory Academic Progress (SAP) Requirements to remain eligible for financial aid. Unusual circumstances? Contact the Financial Aid Office to discuss your options and the appeal process. Contact the Financial Aid Office prior to dropping or withdrawing courses to see if it will affect your aid eligibility.

16. Paying Tuition • Colleges typically accept a variety of payment options including: • Financial aid (grants, loans, and scholarships) • Cash, check, wire transfers, and ACH • Credit cards and debit cards • Third-party payments including employer payments • 529 Savings Plans • Many colleges also offer payment plans that enable students to spread out the amount they owe over a certain period of time. • Be sure that you have enough pending financial aid to cover your billable charges before your college’s payment deadline, or make arrangements to cover any remaining balance. • Contact the Bursar’s Office or Business Office at your college if you have any questions about payment. Even if you already paid your tuition, you could still apply for financial aid and be refunded the amount of aid you qualify for.

17. Don’t Just Pay For College, Succeed in College! Take advantage of available resources! Free Tutoring Services Math & Writing Centers Career Services Get an internship, job, or other experience related to your degree. Study… At least 2-3 hours per week per credit outside of class. Meet with your counselors, advisors, and professors. Get involved…Join a club, sports team, or other organization.

18. Tax Benefits for Education Tax Credits for Higher Education Expenses Two tax credits help offset the costs (tuition, fees, books, supplies, equipment) of college by reducing the amount of your income tax: American Opportunity Credit- Allows you to claim up to $2,500 per student per year for the first four years of school. Lifetime Learning Credit- Allows you to claim up to $2,000 per student per year for any college or career school tuition and fees, as well as for books, supplies, and required equipment that had to be purchased from the school. Even if you normally wouldn’t file a tax return because of your income level, you may wish to consider doing so to claim a tax credit that could put money in your pocket. More details at: https://studentaid.ed.gov/sa/types/tax-benefits

19. Tax Benefits for Education Student Loan Interest Deduction Interest paid on student loans that you borrowed for yourself, your spouse, or your dependent to pay for higher education expenses may be tax deductible. The maximum deduction is $2,500 a year. Qualified Tuition Programs (QTP)/529 Plans QTP/529 plans are established by a state so that you can either prepay or save up to pay education-related expenses. Once you’re in college you withdraw money from your account to pay your education expenses and the money you withdraw will not be taxed. Learn more about state 529 plans. Also read IRS Publication 970, Tax Benefits for Education to see which federal income tax benefits might apply to your situation.