Lesson 4A: Money for College, Terms to Know and the FAFSA
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ollege is expensive, right? Well, you’re going to be able to pay for it, but let’s talk about the important definitions and topics that will help you tackle financial aid in an education fashion.
FAFSA: The form that’s going to help most students get their money for college
– Go to [show-hide] www.fafsa.ed.gov [/show-hide]
– FAFSA stands for: [show-hide] Free Application for Federal Student Aid [/show-hide]
– Federal (government) dollars are given out on a [show-hide] first come, first serve [/show-hide] basis
You need to fill out the FAFSA as early as possible if you want money!!
That means January!
– Once you’ve finished filling out the form, the government will come up with an [show-hide]EFC[/show-hide]
– EFC stands for: [show-hide]Expected Family Contribution [/show-hide]
– This is calculated based on: [show-hide] income, number of people in your household, and current savings. [/show-hide]
– The [show-hide] lower [/show-hide] your EFC, the [show-hide] more [/show-hide] money you will get for college.
– Remember, the numbers are based on [show-hide] your parents’ [/show-hide] information!
– You have to fill out the FAFSA [show-hide] after doing your family’s taxes. [/show-hide]
Terms to Know:
Scholarships[show-hide]Basically, free money for: • Tuition • Books • Fees Scholarships are usually given as cash, but applied to tuition costs through your school. You generally qualify for a scholarship through: • Grades • City or state organizations • Community service • SAT scores Sometimes, you don’t even have to formally apply for scholarships. When you apply to college and fill out the FAFSA or have good test scores, they may automatically offer you a scholarship. [/show-hide]
Grants[show-hide]Grants are based on financial need. Awarded by large organizations like: • Colleges and Universities • Government
Grants do not be paid back!They are generally given to people with extreme need based on the cost of tuition. The more expensive your school, the more grant money you might be eligible for. Pell Grant - the most popular grants in the USA They are given by the US government based on: • Financial need • Tuition Maximum Pell Grant: $5,550 per year It’s not as much money as it seems because college is becoming increasingly more expensive. TEXAS Grants - these incredible grants were created by the Texas legislature. TEXAS stands for: Towards Excellence, Access and Success These grants are specifically for students with financial need. Basic eligibility requirements: Must be Texas resident Cannot have been convicted of a felony or crime involving a controlled substance Students must show financial need The students’ EFC must be less than or equal to $4,000 Registration for Selective Service are exempt from the EFC requirement There are other requirements, but let’s follow the link on the screen to read about those. more requirements Most high school students will meet those guidelines. Award limits: At public universities and colleges: $7,400 At community colleges: $2,400 At public technical colleges: $4,400[/show-hide]
Loans[show-hide]Loans are TEMPORARY money that you will have to pay back. People tend to take out more loans than they need. Don’t be that guy!
KINDS OF LOANS
Stafford Loans: given by the government1. Subsidized: - Government pays interest while you’re in school. - The interest doesn’t start building until 6 months after college graduation. 2. Unsubsidized: - Government does not pay your interest while you are in school. The amount you owe grows while you’re in school Private Loans: - Generally, after $15,000 in loans, you may have reached your limit with government options, and have to take out private loans - Given by: Banks and other financial institutions Many times, they have really high interest rates Perkins Loans Given by: The government - For those people with exceptional need - If you qualify, these are the best types of loans available[/show-hide]
Interest Rates[show-hide]Definition: - The rate at which the borrowed money grows - The higher your interest rate, the faster your loans will build. Meaning the more money you’ll have to pay off. - Don’t ever let people force you to take an interest rate until you shop it around. - Always look for the lowest rate possible[/show-hide]
Work Study[show-hide]Colleges understand that you have to pay certain expenses if you want live. You need money for gas, food, clothes, and entertainment. Colleges help you cover those expenses through work study. You get a job at your school. It’s usually a relaxes position, like working in the library or the rec center. - You get paid at least minimum wage. - Every two weeks, you get a paycheck. - The great thing about work study is that it does not go against what you are eligible to receive in loans, grants, and scholarships. - It’s important to know that not everyone qualifies for work study. You’ll have to show financial need in order to have work study included in your financial aid package.[/show-hide]