Financing for College

Chapter 4, Lesson 2

Lesson Overview

• Costs of college

• Sources of college funds

• Planning to finance a college education

Photo courtesy of Rudy Sulgan/Corbis Images

Chapter 4, Lesson 2

Quick Write

How much do you think it costs to go to college?

Make a short list of ways you can get the money you need to attend

the college of your choice.

Chapter 4, Lesson 2

Costs of College

• Two-year colleges: – Less expensive– Earn an associate’s degree– Average yearly tuition cost in 2005:

• $2,191 for an in-state resident• $4,160 for an out-of-state resident

Chapter 4, Lesson 2

Costs of College

• Four-year colleges and universities:– More expensive– Average tuition for 2005-2006:

• $5,491 for in-state residents at public university

• $7,673 for out-of-state residents• $21,235 for a private university

Chapter 4, Lesson 2

Costs of College

• College Expenses: – Tuition & Fees = $2,500 to $30,000– Books & Supplies = $500 to $1,500– Personal Expenses = $1,000 to $1,500– Transportation = $500 to $2,000– Room and Board = $2,500 to $10,000

• from “The Complete Guide to College Financing & Admissions” CD-ROM program, by Terry Wilfong, College Financial Aid & Packaging

Chapter 4, Lesson 2

Sources of College Funds

• Scholarships and grants – student financial aid that you do not repay

• Scholarship recipients – selected based on academic, athletic, or artistic merit

• Grant recipients – selected based on their financial need

Chapter 4, Lesson 2

Scholarship Opportunities

• http://www.fastweb.com• http://www.college-scholarships.com/100• http://www.guaranteed-scholarships.com• http://www.collegenet.com• http://www.fisherhouse.org• http://www.gocollege.com• http://www.scholarships.com

• from “The Complete Guide to College Financing & Admissions” CD-ROM program, by Terry Wilfong, Scholarships: The Winning Edge

Chapter 4, Lesson 2

Scholarship Opportunities

• Talk to your high school guidance counselor

• Contact each college’s financial aid office for a list of its scholarship programs

• Look for notices on bulletin boards at your school, in a public library, or outside the financial aid office at a nearby college

Chapter 4, Lesson 2

Apply for a Scholarship

• Look carefully at the application requirements– Do you meet all of them?– If not, is there a way you

can?– For example, if an

application calls for a 3.7 GPA and you have a 3.6, can you bring it up before the deadline? Photo courtesy of Comstock Images

Chapter 4, Lesson 2

Scholarships Are Competitive

• Most competitive programs give one award for every 400 applicants

• Don’t give up if you are rejected• Apply for other scholarships• Be careful!

– Every year, scholarship scams defraud hundreds of thousands of students and parents

Chapter 4, Lesson 2

US Government Grants

• Pell grants are need based, or given to students who have a serious financial need

• The Federal Supplemental Education Opportunity Grant (FSEOG) is for students with exceptional financial need

Chapter 4, Lesson 2

US Government Loans

• Stafford loans are the most common – Borrow up to $2,625 for your first year– Borrow a maximum of $23,000 for four

years– Two variations:

• Family Education Loan Program (FFELP)• Federal Direct Student Loan Program

(FDSLP)

Chapter 4, Lesson 2

Other US Government Loans

• Perkins loans are awarded to students with exceptional financial need– Subsidized: the federal

government pays the interest while you are in school

• Parent Loan for Undergraduate Students (PLUS) program– Your parents or a stepparent

can take out loans to help your education Photo courtesy of David Young-Wolff/PhotoEdit

Chapter 4, Lesson 2

Private Loans• Banks and private companies

sometimes charge fees when they make loans

• Sometimes they advertise a low interest rate during the in-school and grace period

• After you graduate, they raise the rate

• Read the loan agreement carefully!

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Chapter 4, Lesson 2

Other Sources of Financial Aid

• Federal Aid – Website: www.studentaid.ed.gov

• Federal Work-Study Program– Provides part-time jobs for college students

• Military Benefits– ROTC scholarships for young people who want

to enter the armed forces after college• College-Controlled Aid

– Many colleges offer their own scholarships, tuition-payment plans, and other forms of aid

• Scholarship Lotteries – Websites give money away to students for their

education

Chapter 4, Lesson 2

Planning to Finance College

• Do some background research on what kind of college you want to attend

• Talk to people in the financial aid offices of the colleges you intend to apply to

• Start collecting information on scholarships, grants, loans

• Complete the FAFSA shortly after January 1 of your senior year

• Borrow only want you need–remember that you or your family must repay any loans you take out

Chapter 4, Lesson 2

Review

• College costs include tuition, room and board, books, laboratory fees, library fees, medical fees, and transportation fees

• Major sources of college funds include scholarships and grants and various types of student loans

• When planning to finance a college education, the best place to start is your high school guidance counselor

Chapter 4, Lesson 2

Summary

• Costs of college

• Sources of college funds

• Planning to finance a college education

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Chapter 4, Lesson 2

Next

• Today we’ve learned about financing for college

• Next we’ll learn about insurance for protecting your resources

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