Understanding College Costs and Award Packaging

1. Understanding College Costs and Award Packaging

2. Agenda Understanding College Costs and Award Packaging • Today we will discuss: • College selection • Finding the right school • How to research colleges from the financial aid perspective • Why having the information early is so important • What’s coming next

3. Getting Started Understanding College Costs and Award Packaging • What are students looking for? • What schools are they interested in? • Why those schools? • Are they focused on the college’s academic and program offering? • Can their needs be met at a variety of schools? • What is driving their choices? • Understanding what is motivating students’ decision making allows us to provide better information

4. Getting Started Understanding College Costs and Award Packaging • http://nces.ed.gov/COLLEGENAVIGATOR/

5. Getting Started Understanding College Costs and Award Packaging Detailed information about each category can be found by clicking the + sign

6. Getting Started Understanding College Costs and Award Packaging Additional search criteria depending on what is important to you

7. Our Case Study: Jesse Understanding College Costs and Award Packaging • Case Study: • Maine Resident • Engineering Major • Wants to stay in New England • Expected Family Contribution (EFC) of 2000 • Search narrowed down to four colleges: • University of Maine • University of Connecticut • Worcester Polytechnic Institute • Massachusetts Institute of Technology

8. Research: A Focus on Financial Aid Understanding College Costs and Award Packaging • It is important to research each of these colleges thoroughly • The focus today is on researching colleges from the financial aid perspective • We will focus on: • Cost • Percent of need met • Understanding financial aid awards • Average loan indebtedness and its impact

9. Research: Cost of Attendance Understanding College Costs and Award Packaging • Cost of Attendance is comprised of: • Tuition and Fees (direct) • Room and Board (direct) • Books and Supplies (indirect) • Travel (indirect) • Miscellaneous Expenses (indirect) • Most up to date information will come from the college’s web site • We will focus on direct costs: tuition, fees, room and board

10. Research: Direct Costs Understanding College Costs and Award Packaging

11. Research: Determining Need Understanding College Costs and Award Packaging • Financial aid offices calculated “Need”: Cost of Attendance (COA) -Expected Family Contribution (EFC) = Need • When determining need, colleges use the full COA including both direct and indirect costs • The EFC is the same for that student at all schools • COA is different at each school so need will be different at each school

12. Research: Determining Need Understanding College Costs and Award Packaging

13. Research: Percent of Need Met Understanding College Costs and Award Packaging • Percent of Need Met is the portion of need that the college fills with financial aid: • Scholarships and Grants – both need and merit based • Federal Work-study • Need based Federal Loans – Direct Stafford and Perkins • Colleges are required to report their Percent of Need Met • Keep in mind that they are AVERAGES! • Individual awards can vary dramatically

14. Research: Percent of Need Met Understanding College Costs and Award Packaging • One source of information is Petersons.com

15. Research: Percent of Need Met Understanding College Costs and Award Packaging • One source of information is Petersons.com We’ll also discuss this later!

16. Research: Impact of % of Need Met Understanding College Costs and Award Packaging

17. What COULD This Mean? Understanding College Costs and Award Packaging • These are only AVERAGES! • Students should always apply to colleges of interest, even if the averages are not great

18. Understanding Financial Aid Awards Understanding College Costs and Award Packaging • Where does the potential financial aid come from: • Grants and scholarships? • Loans – federal - student and/or parent – credit based? • Each college has flexibility to determine their award philosophy (except for “entitlement” programs) • Some colleges… • build in loans first • do not include any loan • “gap” student • gap and early award of grant funds • have significant “other” funds; others have none

19. Understanding Financial Aid Awards Understanding College Costs and Award Packaging

20. Understanding Financial Aid Awards Understanding College Costs and Award Packaging • Colleges rarely share their awarding policies • The student specific award letter is the only way to know what that student is eligible for • The Petersons information has another piece of information that provides some early insight: Average Loan Indebtedness

21. Research: Average Loan Indebtedness Understanding College Costs and Award Packaging • Families borrow loans for two primary reasons: • To cover their EFC • To fill unmet need • Average Loan Indebtedness Upon Graduation • This information is from Petersons

22. Research: Potential Earning Understanding College Costs and Award Packaging • Do students understand their earning potential – especially as it relates to the potential debt? • Career Infonet - www.acinet.org/acinet/

23. Research: How Much Debt is Affordable? Understanding College Costs and Award Packaging • Salary/Debt Wizard – www.famemaine.com

24. Research: Monthly Loan Payments Understanding College Costs and Award Packaging • Impact of Student Loan Debt • Smart choices regarding choice of college impact students for years to come • Life style while in college will also have a significant impact!

25. Why Does All This Matter? Understanding College Costs and Award Packaging • The information helps establish general expectations • What happens when a student has their heart set on a college that is unaffordable? • Emphasizes the importance of financial aid safety schools • Helps students and parents understand need to save, potentially resulted in expanded options

26. What’s Coming? Understanding College Costs and Award Packaging • Net Price Calculator • The HEOA of 2008 requires institutions to post a net price calculator on their web sites by August 2011 • The template has eight data elements for students to enter: age, marital status, children, family size, # in college, parent income for dependency students, living and residency status • Colleges will have to provide estimated total cost, tuition & fees, room & board, books & supplies, personal expenses & transportation, and merit- & need-based grant aid • The end result will be the estimated net price (price of attendance minus grant aid)

27. In Closing… Understanding College Costs and Award Packaging • The information is meant to provide an earlier understanding of what college is likely to cost • The information is not meant to scare families; it is better they have this information early rather than the spring or summer before they start college • This information can help them make the best decision possible!

28. Questions? Understanding College Costs and Award Packaging Finance Authority of Maine 5 Community Drive P.O. Box 949 Augusta, ME 04332 1-800-228-3734 education@famemaine.com www.famemaine.com