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Understanding Financial Aid
Transcript of Understanding Financial Aid
design by Dóri Sirály for Prezi
What you will learn about today...
1. What is GAP?
2. What are the parts of a financial aid package?
3.How to compare financial aid packages
4.What can you do to fill the GAP?
So what is GAP?
No...not THE GAP, GAP
Total Cost of Attendance-Financial Aid Package = GAP (unmet need + EFC)
Financial Aid Package = Grants(federal and school), Loans, Work Study
GAP occurs when a financial aid package does not
cover the total cost of attendance.
Different parts of a Financial Aid Package and what they mean...
financial aid that
have to be paid back
financial aid that you
A campus job that allows you to earn money as a student
Grants/scholarships are the best form of financial aid—money that does not need to be paid back.
There are federal grants and institutional grants. You are eligible for these grants depending on your EFC.
Pell Grants are federal grants—these grants max out at $5775 per year.
Institutional Grants are college grants—these come from the school’s funds and can vary from 0 to full comprehensive cost.
There are three types of loans: federal, institutional, and private loans.
come from the government and are disbursed through the Direct Loan Servicing program (Stafford Loans), or are given to schools to distribute(Perkins Loans).
are offered directly from the college
come from an outside lender. These loans often have a higher interest rate and payment begins once the loan is disbursed.
vs. Unsubsidized Loans
Interest begins to accrue 6 months after you graduate(currently a 4.66% rate)
Interest begins to accrue as soon as you take out the loan. If you do not make payments while you are in school, then it will be added to your total loan at the end. If you do this, you will be paying interest on your interest(currently a 4.66% rate)!
Subsidized loans are preferable.
Work-study is paid for by the school but often subsidized by the federal government.
Work-study operates on the premise that you will make the amount of money they indicate (usually between $1000 and $3000) in a guaranteed campus job during the school year.
Things to consider:
1. Difference in comprehensive cost
2. The amount of GAP
3. Difference between grant aid and loan aid
4. Interest rates for loans
Comparing Financial Aid Packages
Remember that although loans are counted as part of a financial aid package now, you will have to pay back all of this money (plus interest) later.
Perkins loans have 5.0% interest rate
Stafford loans have a 4.66% interest rate
Parent PLUS loans have a 4.29% interest rate
Make sure you know what the interest rate is for any institutional loan a college might offer you.
Debt larger than the starting annual salary in your first post-college job can be extremely hard to pay off.
Remember...you can turn down some portions of a
financial aid package—namely, loans that you do
not want to take out (the catch is you obviously
need to find an alternative way to pay that money)
Hey man, I can loan
you some money, but you
have to pay me back!
A scholarship is an amount of money that is given by a school, an organization, etc., to a student to help pay for the student's education and is often given by a private donor. Examples include the ones in the OHCHS Scholarship packet and/or State scholarships.
You are required to report any scholarships you receive to your college financial aid office.
What you can do to fill the GAP
1. Call your financial aid office and see if they can offer you more assistance. Let the college know if you have had a change of circumstances since you filed the FAFSA.
2. Call Business/Bursar's office and ask about payment plans.
3. Seek out a PLUS or private loan if necessary
4. Apply for scholarships-
you should be applying for OHCHS ones NOW!
5. Consider a more affordable school
Pirate University vs. Ninja University
First highlight all the free money (grants &scholarships & work study)
Next highlight the amount of loans
Even though Pirate U is $28,000 more than Ninja U, the difference in GAP is only $6500. However, Ninja U is only $500 more than the EFC.
Compare your Financial Awards by going here:
Next Steps for Financial Aid
1. Compare your financial aid packages
2. Pick a school
3. Accept your financial aid package from the school you choose
4. Fill out all paperwork they ask you to do (ex. Dependent Student Verification)
5. Pay your school deposit
6. Attend your school orientation/accepted student days
7. Take care of loan interviews/paperwork