Financing Your Child’s College Education

1. Financing Your Child’s College Education

2. What does college cost? Based on estimated expenses at Louisiana State University – Baton Rouge for a dependent student living on campus who graduates from high school in 2008 assuming a 4% annual increase

3. Basis of Aid • Merit-Based aid is based on a student’s academic achievement, grades, ACT/SAT scores, talent, ability, athletic achievement, etc • Need-based aid is based on the student’s financial need

4. Financial Need COST OF ATTENDANCE - EXPECTED FAMILY CONTRIBUTION FINANCIAL NEED

5. Financial Need • Cost of Attendance (COA) • Tuition and fees • Room and board • Books and supplies • Transportation • Miscellaneous personal expenses • Expected Family Contribution (EFC) • Income • Assets (excluding the family home) • Family size • Number of family members attending college (excluding parents) • Age of parents

6. Types of Financial Aid • Scholarships • Gift Aid – Based on Merit • Grants • Gift Aid – Based on Need • Employment Opportunities • Loans • Must be repaid – may be based on need

7. Sources of Financial Aid • State • Federal • Institutional • Private

8. Institutional Aid • Each institution has its own merit-based scholarship programs • Many schools have their own need-based aid programs • Investigate aid opportunities early • Each institution has its own aid application process and deadline • Upperclassmen should also check with their department for aid opportunities for students in a specific major

9. Private Aid • The best source of information on private aid is the Internet. There are numerous free scholarship search services available • See LOSFA website Useful Internet Links page or Surfing the Web for a listing (www.osfa.la.gov) • Private aid can be based on merit or financial need • Providers of private aid include companies, civic organizations, religious organizations, clubs, etc.

10. Federal Pell Grant • General Information • Gift aid • Portable - can receive at any eligible institution • Maximum Award: $5,550 • Eligibility Criteria • Undergraduates without a bachelor’s degree or first professional degree • Must demonstrate financial need

11. Campus-Based Federal Aid Programs • FSEOG • LEAP • Federal Work Study • Perkins Loans • Stafford Loans

12. Federal Supplemental Educational Opportunity Grant (FSEOG) • General Information: • Gift aid • Maximum award $4,000 • Eligibility Criteria: • Undergraduates without bachelor’s or first professional degree • Must demonstrate exceptional financial need

13. Leveraging Educational Assistance Partnership (LEAP) • LEAP uses federal and state funds to provide need-based grants to academically qualified students • Maximum Award: $4,000 • Recipients determined by the institution’s financial aid office

14. LEAP Eligibility Requirements • Be a U.S. citizen or eligible non-citizen • Be a Louisiana resident • Be enrolled as a full-time undergraduate student • Apply by completing the FAFSA • Demonstrate substantial financial need • Must have one of the following: • 2.00 cumulative high school GPA • 45 on the GED • 20 on the ACT • 2.00 cumulative college GPA • Schools may establish additional criteria

15. Federal Work Study • General Information: • Wages must be not less than current minimum wage • Eligibility Criteria: • Undergraduate, graduate or professional students, including less-than-half-time students • Must demonstrate financial need

16. Federal Perkins Loan • General Information: • 5% interest rate • Annual Loan limits • $4,000 for undergraduates; • $6,000 for graduate or professional students • School is the lender • Repayment begins 9 months after leaving school • 10 year repayment period • Eligibility Criteria: • Undergraduate, graduate, and professional students • Must demonstrate financial need • Must be willing to repay the loan

17. William D. Ford Direct Loan Program • The source of long-term, low-interest loans for undergraduate, graduate, and professional students, and parents of dependent students • Subsidized Stafford Loan • Unsubsidized Stafford Loan • Parental Loans for Undergraduate Students (PLUS) • Consolidation Loans • Grad PLUS Loans

18. Subsidized Stafford Loan • Loan Information • Loan is need-based • Federal government pays all interest while: • Borrower is in school • During the grace period • During periods of deferment • Interest rate is variable, capped at 8.25% • Eligibility Requirements • Student must have Financial Need • Student must be enrolled at least half-time • Student must maintain Satisfactory Academic Progress (SAP) as defined by the school to continue receiving loans • Loan Repayment • Loan has a 6 month Grace Period after leaving school or dropping below half-time before entering repayment • 10 year repayment period

19. Unsubsidized Stafford Loan • Loan Information • Loan is not need-based • Loan may replace all or part of the student’s EFC • Borrower is responsible for interest at all times • Interest rate is variable, capped at 8.25% • Eligibility Requirements • Student must have completed the FAFSA • Student must be enrolled at least half-time • Student must maintain Satisfactory Academic Progress (SAP) as defined by the school to continue receiving loans • Loan Repayment • Loan has a 6 month Grace Period after leaving school or dropping below half-time before entering repayment • 10 year repayment period

20. Plus Loans • Loan Information • Parent may borrow up to the Cost of Attendance less other financial aid received by the student • Interest rate is annually variable, capped at 9% • Eligibility Requirements • Borrower must be the parent of a dependent undergraduate student • Borrower must not have an adverse credit history • Loan Repayment • Repayment begins 60 days after the loan is fully disbursed • 10 year repayment period

21. Dependent Undergraduate Students Independent Students or Dependent Students Whose Parents Are Denied Plus Loans Borrower’s Academic Level Combined Subsidized & Unsubsidized Borrower’s Academic Level Subsidized Unsubsidized Total Freshman $3,500 Freshman $3,500 $4,000 $7,500 Sophomore $4,500 Sophomore $4,500 $4,000 $8,500 Remaining Undergraduate $5,500 Remaining Undergraduate $5,500 $5,000 $10,500 Graduate or Professional $8,500 $10,000 $18,500 Loan Limits

22. Total Cumulative Loan Limits Dependent Student $23,000 Independent Undergraduate $46,000 Graduate Student $138,000 PLUS Loans No Federal Limit Loan Limits

23. The LA College Payment Plan • START Saving Program • Early Start • TOPS • Student Loans

24. START Saving Program • Louisiana’s college savings program, a qualified tuition program under Section 529 of the Internal Revenue Code, offering earnings that are exempt from state and federal taxes, state matching contributions, and seven investment options.

25. Early Start • The Louisiana Early Start Program provides tuition assistance to eligible 11th and 12th grade students from public high schools that enroll in eligible college courses for dual credit at an eligible public or private college or university.

26. TOPS • Louisiana’s Taylor Opportunity Program for Students, a series of merit-based scholarships that award amounts equal to tuition, some including a stipend, at a state public college, university, community college or technical school, (or the weighted average of public school tuition at certain in-state private colleges).

27. Student Loans • Beginning July 1, 2010, all student loans are now made through the William D. Ford Direct Loan program. • Students should take out loans as a last resort and only borrow the amount needed for their education. • Loans must be paid back.

28. QUESTIONS?