Personal Finance: Module 1 Lesson 2

Prepare for the JourneySection 2.2 – Show Me the Money!

Prepare for the Journey • Slide 2

Section 2.2 objectives

Students should be able to analyze price and financial components

of postsecondary programs;

understand the purpose, timeline, and information necessary to complete a FAFSA;

explore and compare the types of available assistance; explore ways to reduce the cost of attendance

and minimize student loan debt; and

learn about supplemental college support options.

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Glossaries

The SmartStudent™ Guide to Financial Aid

Federal Student Aid Glossary

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You can go!These students thought they couldn’t go to college:

You Can Go!TM is a trademark owned by the College Board, which was not involved in the production of, and does not endorse, this presentation. You Can Go!TM by the College Board. Copyright © 2012. The College Board. www.collegeboard.org. Reproduced with permission.    

You Can Go!™ video

Prepare for the Journey • Slide 5

Cost of Attendance (COA)= Tuition – the price that an institution charges

for its instruction

+ Fees – additional charges that help the

institution offset the cost of providing student or administrative services

+ Living costs – includes housing and meals

(also called room and board), travel, personal expenses, books, school supplies, etc.

Prepare for the Journey • Slide 6

Average cost of attendance per year for undergraduates

Source: You Can Go!TM by the College Board. Copyright © 2012. The College Board. www.collegeboard.org. Reproduced with permission.   

http://nces.ed.gov/collegenavigator/

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Most students

pay far less than

the high prices

talked about in

the media.

You Can Go!™

“

”

Prepare for the Journey • Slide 9

Advertised price versus net price

The average advertised price

(also called sticker price) of one

year of tuition and fees for a

public four-year college is $8,240.

But the average net price

is just $2,490.

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Net price calculator What is a Net Price Calculator?

An online tool that allows you to input some basic

personal and family information which in turn

gives you an estimate of how much your

education will cost at a particular institution

Videos to help explain

Net Price YouTube Video 1

Net Price YouTube Video 2

How to find a Net Price Calculator

CollegeNavigator

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Tools to help lower college costs

1. Savings!

2. Work while in school

3. Scholarships

4. Grants

5. Federal work-study

6. Student loans–as a last resort

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Savings–always the BEST way!

Savings Tools – to help you and your family save

for your education

FinAid Saving for College

Savings Calculator – online tool that gives you

an estimate of how much money you will need to

save for your postsecondary education

Savings Calculator

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Work your way through

Meet Jonathan: You Can Go!™ Jonathan's story

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Types of financial aid

Need-based aid is awarded to students who

demonstrate financial need as determined by

the government and the college they attend.

Merit-based aid is awarded to students

who demonstrate outstanding academic

achievement, remarkable characteristics,

or special talent in performing arts, athletics,

and other areas.

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Scholarships

FREE Money – doesn’t have to be repaid!

May be awarded based on two things:

Merit Academics (grades, ACT/SAT scores, class standing)

Performance (sports, band, dance, leadership, etc.)

Program (math, science, education, etc.)

Various (first in family, disability, gender, religion, etc.)

Need (financial need)

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Search for scholarships Finding and applying for scholarships

Institutional scholarships: UT–Knoxville

Top 5 scholarship search engines

10 Killer Tips for Scholarship Applicants

Attention students! There should never be

a charge to search for or apply for individual

scholarship awards.

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College Board’s “Big Future”7 Things You Need to Know About Financial Aid

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FAFSA: Gateway toStudent Financial Aid The Free Application for Federal Student Aid uses

information to determine eligibility.

If you are under 24 years old on the day your FAFSA is

filed, your parents will need to provide personal information.

FAFSA requires SS#, tax return, W-2, bank balance, and

untaxed or investment income information.

Entering false or misleading information on a FAFSA can

result in loss of student aid.

FAFSA on the Web

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FAFSA: When and how to file First step: request a PIN before filing FAFSA.

Apply for a PIN

Begin filing in January!

Pay close attention to ALL FAFSA deadlines.

Student Aid Deadlines

File electronically via secure government site.

After you complete the FAFSA, you will receive

a Student Aid Report (SAR) with your EFC.

FAFSA Facts

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Demonstrating financial need

Cost of Attendance (COA)

Estimated Family Contribution (EFC) Demonstrated Need

–

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Demonstrating financial need

Simplified EFC

Assets are excluded if family receives income-based

government benefits and its Adjusted Gross Income

(AIG) is $49,999 or less.

Automatic Zero EFC

Calculates a zero EFC if family income is

$23,000 or less.

EFC Resources: EFC Formula EFC Calculator FAFSA4Caster

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Grants: more free money

Need-based aid

Requires you to complete a FAFSA

Types of grants

State Tennessee Student Assistance Award

Federal (Pell Grant, Federal Supplemental

Education Opportunity Grant/FSEOG)

School or institution-based

Vanderbilt’s Expanded Aid Program

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Federal work-study Need-based award

Requires a FAFSA

Part-time employment

Funds are limited!

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Student LoansAn education or student loan is a debt that

must be repaid with interest!

Must sign a Promissory Note promising

to pay the money back

Interest rates for federal student loans

may be lower than regular consumer loans

Standard repayment term is 10 years

Student Loan Calculator

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Student loan types Direct Student Loan – a student loan that is borrowed directly from

the Department of Education

Subsidized Stafford Loan – a direct loan based on financial need;

the government pays the interest while the student is in school

Unsubsidized Stafford Loan – a direct loan available to any student

(is not need-based), and the government does NOT pay the interest

Perkins Loan – a loan based on exceptional need

PLUS Loan – a private loan program offered to parents

Federal Student Aid Student Loan Information Page

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Student loan terminology Default – if a borrower doesn’t make required loan payments for at least 270

days, this violates the loan agreement (risking payment in full due immediately)

Forbearance – if students experience temporary financial difficulty they may

request to stop loan payment for up to a year without penalty; however,

interest continues to be added

Deferment – students who need to take a temporary break from their studies

may request to postpone their loan repayment without interest until they can

return to school at least half-time

Loan consolidation – combines several smaller student loans into one big

loan with one lender and one payment

Need to talk to a real person?Call the Federal Student Aid Information Center at

1-800-4-FED-AID (1-800-433-3243) or 1-800-730-8913 (if hearing impaired)

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Summary of the financial aid process

Types of Student Financial Aid

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Additional financial assistance

TEACH Grant

Segal AmeriCorps Education Award

Montgomery GI Bill

Loan Forgiveness Programs

Academic Common Market

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Tips to help lower costs

Start saving today!

Make high school count.

Enroll in a closer, smaller, public school.

Avoid borrowing money for living expenses.

30 Ways to Reduce College Costs

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Financial aid scams Never give out personal information until you have done

an extensive background check on the company.

Ask the organization how it found you.

Never deal with any organization that has no physical location

(e.g. it only has a P.O. box, email, or web address).

Never send anyone money in any form.

Assume it’s a scam, walk away, or hang up whenever the

situation feels wrong or you feel pushed in any way.

Free $ for College for Dummies Cheat Sheet

How to Protect Yourself from Financial Aid Scams

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Satisfactory Academic Progress = SAP

Must be enrolled in a degree

or certificate program

Required to maintain eligibility

for federal aid

Know your college’s SAP policy!

Always consult the financial aid office

before dropping a college course!

Don’t get caught with your SAP down!

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For this project, the PR/Award Number is V215W100015

and the Department of Education is the funding agency.

This information is provided for the reader's convenience. Tennessee and U.S. Department of

Education are not responsible for controlling or guaranteeing the accuracy, relevance, timeliness, or

completeness of this information. Further, the inclusion of information or Web site address does not

reflect the importance of the organization, nor is it intended to endorse any views expressed, or

products or services offered.

Financial Education for College Access and Success