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Financing Higher Education

Financing Higher Education. how to get it and how to pay for it. Who We Are. “Making college accessible and affordable for Illinois students.” - ISAC’s Mission Statement. Is a college education a sound investment?. Deal or No Deal. What are the costs?. Tuition & Fees.

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Financing Higher Education

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  1. FinancingHigher Education how to get it and how to pay for it

  2. Who We Are “Making college accessible and affordable for Illinois students.” - ISAC’s Mission Statement

  3. Is a college education a sound investment? Deal or No Deal

  4. What are the costs? Tuition & Fees Room & Board Transportation Books & Supplies Miscellaneous Living Expenses + Cost of Attendance (COA)

  5. Cost of AttendanceAverage U.S. Undergraduate Budgets, 2012-2013 $43,289 $35,312 $22,261 $15,584 Source: The College Board, Trends in College Pricing 2012; Annual Survey of Colleges.

  6. Increase in cost College costs are rising, and that's a fact. In Illinois alone, tuition increases have averaged between 7 and 8 percent each year for the past 20 years. Source: Illinois Student Assistance Commission, Historical Illinois Tuition & Fees

  7. Is college worth the cost? The min. wage in IL is $8.25/hr = $330/week = $1,320/month = $15,840/year Individuals with higher levels of education earn more and are more likely than others to be employed. Source: Illinois Department of Employment Securities, Learn More Earn More, 2010.

  8. Job TrendsGrowth RatesIn Illinois, jobs that require higher education are growing faster than those that require less education. Average Projected Growth Rate for all Jobs All Jobs Growth Rates for Jobs That Require Some Higher Education Advanced Degrees Bachelor’s Degrees Associate’s Degrees Postsecondary VocationalTraining Growth Rates for Jobs That Do Not Require Higher Education Work Experience ina Related Occupation Moderate-term on-thejob Training Short-term on-thejob Training Projected Rate of Increase in Number of Jobs Source: Illinois Department of Employment Securities, Learn More Earn More, 2010.

  9. How to get it College Education

  10. Why do YOU want to go to college?

  11. There is no “one-size-fits-all” Start with the end in mind

  12. Know the Players It is in your best interest to know their roles

  13. Illinois Colleges and Universities Different types of degrees come from different types of colleges for different types of study. • Certificates, Licensures & Registrations • Undergraduate (i.e. Associate & Bachelor) • Graduate (i.e. Master, Doctoral, Professional) Refer to isac.org for a Map of Illinois Colleges.

  14. Community College Myths Are Not Facts Myth 1. “I just won’t get a high quality education at a community college.” Myth 2. “Financial aid is harder to get at a community college.” Myth 3. “Transferring to a four-year college is very difficult to do after attending a community college.” Myth 4. “Even if I am able to transfer to a four-year college, I’ll be unprepared for the rigors of tougher classes.” Myth 5. “If my child attends a community college, he is likely to drop out.” FACT. A good student can get a good education almost anywhere. Source: Bissonnette, Zac (2010). Debt Free U.

  15. Choose a Major That Makes Sense Regional Wage and Employment Information Recognize that your intelligence, motivation, passion, and choice of career path will have a far greater impact on your financial and life success than your choice of major. Source: Illinois Department of Employment Security, Economic Information and Analysis Division. Wage data for 2008Q3; Employment projections 2006-2016 series. Visit lmi.ides.state.il.us for more detailed information.

  16. How much can you afford, and where will you get the money? Show me the money

  17. How will youpay for four years of college? Start Early…

  18. What is Financial Aid? Financial aid helps make up the difference between what you can afford to pay and the cost of college. gift aid Grants Scholarships Work-Study Loans self-help aid Note: Funds may be merit-based, need-based, or non need-based.

  19. Sources of Financial Aid Financial aid comes from a variety of sources.

  20. The Financial Aid Process

  21. The Big Three Financial Aid Programs Total = $14,518 State of Illinois Monetary Award Program (MAP) Federal Pell Grant Federal Supplemental Education Opportunity Grant (FSEOG) * Maximum award for 2013-2014

  22. Financial Need How much aid can a student receive? Cost of Attendance (COA) Expected Family Contribution (EFC) Financial Need - = • Ask Questions • What percentage of my financial need will you meet? • What percentage of the financial aid offer will be made up of loans?

  23. “Schools are not car dealerships where you can get a better deal through a combination of bluff and bluster. It’s a much more formulaic process.”- Zac Bissonnette, Debt-Free U (2010)

  24. No Savings, No Loan, and No Financial Aid Change Your Spending Habits Pay for College Monthly • Tuition Payment Plans (a small set-up fee may apply Pay-As-You-Go Method • Hard-Work • Short-Term Sacrifice

  25. Tax Credits The IRS offers federal income tax credits to certain tax payers for higher education expenses. See IRS Publication 970 at www.irs.gov

  26. How to handle student loans after graduation It’s a Big, big loan

  27. What is a loan? A loan provides borrowed funds that you must repay with interest. It is a serious financial and legal obligation. The federal government requires: • Entrance Counseling • Exit Counseling

  28. Subsidized vs. Unsubsidized Within limits, the financial aid administrator of the college determines the amount for which you are eligible. Know the differences

  29. Federal Loan Programs (for Undergraduates) Type Rate Grace Note: Unsubsidized Stafford Loans for Graduate students have a fixed interest rate of 5.41%. * FAFSA and Program Application(s) are Required

  30. Borrowing Limits How much can a student borrow? Federal student loans have annual maximums that are based on: Too many students borrow amounts that are likely to cause them difficulties, particularly if their earnings are either below average or unusually uneven over time.

  31. Debt Burden How much should a student borrow? Experts recommend that student loan payments do not exceed 8% of the work income in year one. For every $10,000 in income, no more than $800 in loan payments per year

  32. Debt to Income Ratio One way to look at the relationship between monthly debt and income. Total Monthly Debt Payments Total Monthly Net Income Debt to Income Ratio Source: Money Management International. Understanding Money and Credit.

  33. Know What You’re Signing All federal student loan borrowers must complete and sign a Master Promissory Note (MPN), agreeing to repay: As with any debt, you are responsible for paying your loan even if you:

  34. Repayment /Forgiveness Programs Typically, qualifying borrowers are those who commit to work for a specific amount of time in a field that has experienced a shortage of workers.

  35. Avoid Default Default is defined as being 270 days delinquent or behind in loan payments. Loans are not dischargeable in bankruptcy.

  36. Know Your Rights As a federal student loan borrower, you are entitled to the following:

  37. How does my student loan affect my credit? What is a credit score? • A defaulted student loan (270 days delinquent) will stay on your credit report for 10 years! • Delinquencies (late payments) reduce your credit score • A number based on a statistical analysis of a person's credit files • An indicator of the likelihood that a person will pay his or her debts

  38. Your Credit History Matters

  39. Factors to consider DO’s and Don'ts

  40. Graduate with Less Debt Debt adds up quickly, so keep an eye on it.

  41. Manage Your Debt

  42. Look at college as a rational investment, not a coming-of-age ritual where money is no object. - Zac Bissonnette, Debt-Free U (2010) Time, Money, and Energy

  43. Trusted Web Sites Get your hands on up-to-date, accurate and trusted sources of information to learn what you need to know.

  44. Find answers to your questions Illinois Student Assistance Commission 800.899.ISAC (4722) isac.org isac.studentservices@isac.illinois.gov

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