Transcript Slide 1
Financial Aid
Financial Literacy Spring 2012
209.946.2421
s
www.pacific.edu/financialaid
Overview
Resources
Terms to understand
Loans
Capitalization, Interest and Repayment
Updates
New Financial Resources
Types of Financial Aid Loans Financial Aid Resources Literacy, Budget, Student Consumer & Glossary FAQ What would you like?
Definition: Financial Literacy
Financial literacy is the ability to understand and analyze your finances and your financial opportunities, enabling you to participate more fully in the decisions you make by making informed choices. We want our students to have opportunities to be financially literate when they step onto campus, with the goal of producing graduates who are prepared to successfully handle the financial responsibilities of life.
Financial Eligibility
Estimated academic year Costs of Attendance
Tuition and other actual and estimated costs
Expected Family Contribution (EFC)
Calculated on the basis of FAFSA information using formulas prescribed by the federal government
Financial Need (as indicated by FAFSA)
Most aid is for students who demonstrate financial need Exceptions: PLUS Loan
(parents)
, Unsubsidized Stafford Loan Your eligibility can vary from school to school! www.studentaid.ed.gov/pubs
Sub vs. Unsub
Subsidized Loans
are a type of loan in which the interest associated with the loan is paid by the government while the student is enrolled in school (in-school deferment) at least half-time. The student does not have a responsibility to repay interest paid by the government.
Unsubsidized Loans
are a type of loan in which the student is responsible for the interest that accrues on the loan while in school. Depending on the loan the student may have the option to defer payment of accrued interest until after graduation (i.e. not pay until after graduation) or dropping below half-time.
Stafford Loans
Students who demonstrate financial need may qualify for a
subsidized
Stafford Loan; others may qualify for an
unsubsidized
loan. The interest rate on the Federal Direct Stafford Loan is a fixed rate. The interest rate for loans disbursed on or after July 1, 2012 is: Federal Direct Stafford Loan (subsidized) Only available to undergraduate students - 6.8% Federal Direct Stafford Loan (unsubsidized) All students - 6.8%
www.pacific.edu/financialaid
Federal Perkins Loan
Perkins is “serviced” by Pacific (ECSI) 9 Month Grace Period 5% fixed interest rate Demonstrate financial need Perkins “Exits” are handled separately Questions? go.pacific.edu/studentloans
Federal Direct PLUS Loans:
Federal PLUS Loan (Application Online)
For parents of dependent undergraduate students FAFSA required - 7.9% interest rate 4% fee upon disbursement Credit based Denial allows for increase of Unsub Loans
Loan Exit “Interviews”
Is required before you withdraw, graduate, or drop below half-time attendance (even if you plan to transfer to another school) Helps you understand your rights and responsibilities as a student loan borrower Provides useful tips and information to help you manage your loans May have 2 sets (EX/SL holds)
NSLDS
(National Student Loan Data System) The National Student Loan Data System (NSLDS) is the U.S. Department of Education's (ED's) central database for student aid. NSLDS receives data from schools, guaranty agencies, the Direct Loan program, and other Department of ED programs. NSLDS Student Access provides a centralized, integrated view of Title IV loans and grants so that recipients of Title IV Aid can access and inquire about their Title IV loans and/or grant data.
www.nslds.ed.gov
Forbearance, Deferment and Grace
Grace Period —Amount of time before loan repayment begins after dropping below half-time or leaving school. 6 months for Stafford and 9 months for Perkins.
Deferment —Postpone repayment of your loans temporarily.
Forbearance —forbearances allow you to temporarily postpone repayment. Forbearance may also involve an extension of time to make payments or acceptance of smaller payments. Unlike deferments, forbearances may be granted if you are already in default (hardship).
Understanding Capitalized Interest:
Capitalized interest is interest that accrues on your initial loan amount while you are still enrolled. The chart below demonstrates an example of the difference between paying your loan monthly interest payments vs. deferring interest payments until after you graduate.
Interest Paid in school: $3,500 loan: 6.8% Interest: 4 years in school:
Amount Borrowed: Monthly Interest Payment (while in school): Interest to Capitalize: Principle Balance at Repayment: Estimated Monthly Payment (once in repayment): Total Payments: Total Interest Paid: Total Savings:
Capitalize Interest:
$3,500 $0 $952 $4,452 $50 $5,950 $2,450 N/A $3,500 $19.84
$0 $3,500 $50 $5,302 $1,802 $648
Repaying Your Loans*
Amount #Pay Payment @ 6.8% Total Paid
$11,500 120 $132.34 $4,381 $15,881 $13,500 120 $155.36 $5,143 $18,643 $15,500 120 $178.37 $5,904 $21,404 $17,500 120 $201.39 $6,667 $24,167 $19,500 120 $224.42 $7,429 $26,929 $21,000 120 $247.42 $8,190 $29,690
*Amounts based on Stafford loan rates over 10 years
Graduate Aid
Assistantships
Grad PLUS loan
Unsubsidized Stafford Loan
Repaying Your Loans #2*
Amount #Pay Payment @ 7.9% Total Paid
$10,000 120 $120.80 $4,496 $14,496* $20,000 120 $241.60 $8,992 $28,992 $30,000 120 $362.40 $13,488 $43,488 $40,000 120 $483.00 $17,984 $57,984 $50,000 120 $604.00 $22,480 $72,480
*+$50 every month saves $1,500 over course of loan *Amounts based on PLUS loan rates over 10 years
Cal Grant
July (Budget)
Assumed in Packaging
University Contingency Plans
Need help? Contact us:
Financial Aid Office
s
Knoles Hall
Open Monday –Friday, 8:30–5:00 Alternate Summer Hours Counselors available (except Wednesday mornings) 9:30 –12:00 and 1:00–4:00 209.946.2421 • [email protected]
www.pacific.edu/financialaid