In this month's issue of our newsletter we are going to talk about
how to pay for College

01. Costs of Colleges on Average
02. Applying for Financial Aid
03. Some questions to consider:
04. Comparing Loans Options
05. Terms and Conditions
06. Questions and Answers

Anyone who has looked into attending college knows that the costs do not stop at tuition. You are responsible to pay for your books, fees, labs and room and board. When all is said and done the figure can be unimaginable. Luckily the states and governments have made it so that everyone has a chance to go to college without the burden of payment. Many forms of financial aid are available to anyone who qualifies. Financial aid is offered in many different options. There are loans, grants, and scholarships. Each one is applied for in a different way and has its own benefits.

Scholarships are the most attractive form of financial aid to most people since they do not need to be paid back. Scholarships are generally known as "free money" which is used to pay for your education. Clubs, businesses, schools, and organizations often provide them. Scholarships are not only rewarded for academics. The majority of the time scholarships are rewarded for athletes, or people studying a specific field. Some scholarships are even for a specific race or because of the area one lives in! Although often times finding out about scholarships takes a little research it will definitely pay off.

Grants also do not have to be repaid. There are government-funded grants that are referred to as the Federal Pell Grant. These grants are awarded to undergraduate students only. The federal government guarantees that every school will be able to have enough funding to allow all eligible students the opportunity to obtain this grant. Other grants that are available to students come from state governments, organizations and schools. A grant is considered to be a gift to students who demonstrate a financial need based on formulas. To find out more about grants that can be offered to you please contact your school's financial aid office.

Costs of Colleges on Average

Annual Cost	2 year public college	4 year public college	4 year private college
Tuition	$2,000	$5,000	$20,000
Out of district state charges	N/A	$7,000	N/A
Books and supplies	$750	$850	$900
Room and board	$5500	$6500	$7500
Transportation	$1100	$1000	$1100
Other expenses	$1200	$1100	$1100
Total	$10,550	$21,450	$30,600

Applying for Financial Aid

Applying for financial aid may seem difficult but once you know what steps to take it is really quite simple. We will go through each step and explain in detail the process. This is an overview and you will still want to see an advisor at the school that you plan to attend to get their advise on any questions not answered throughout this newsletter.

Your first step is the FAFSA, which stands for Free Application for Federal Student Aid. This must be completed and turned in as early as January 1 and no later than the first day of your class. Ideally you should get this in as soon as possible.

Federal Eligibility Requirements

1. Must be a U.S citizen or non-citizen with a valid SSN
2. Males between 18-25 must be registered for Selective Service
3. Must have a high school diploma or GED
4. Must be enrolled and seeking a degree through an eligible program.

Information Required:

SSN

Drivers License Number

Income tax returns

Records of untaxed income

Current Bank Statements

Avoid Common Errors

1. Read instructions carefully.
2. Do not leave any field or question blank; instead insert a 0 or N/A.
3. Double check for accuracy
4. Make sure all required signatures are there
5. For online help simply go to www.fafsa.ed.gov

Step two is receiving and understanding your Student Aid Report, which is often referred to as a SAR. Your SAR will arrive four to six weeks after submitting your FAFSA. Your SAR is simply a review of what you submitted on your FAFSA. On this SAR you will notice something in the upper right hand corner that is usually referred to as an EFC. EFC stands for expected family contribution.

This figure is what your family is expected to pay toward your education. This will be used to figure out how much financial aid you will qualify for. The schools that you listed on your FAFSA will each receive a copy of this. Make sure you check with the schools to make sure they have received this so that it can be processed. You will also want to review this yourself and make sure that no errors were made. Assuming everything is correct you can send copies to other schools you are interested in attending.

You are now going to receive award letters. An award letter is letting you know exactly what they will reward you. It is usually the breakdown of grants, federal or state aid you are eligible for. You will need to go through each letter and determine what the best route for you to take is.

4.Some questions to consider:

1. Is this package the same every year you attend the school?

2. Are grants and scholarships renewable each year?

3. Is money from the grants or other aids decreased each year?

4. Is there a certain grade point average that is expected and if so what?

5. Is there a penalty or loss of money if you receive outside scholarships?

Now you have decided to accept one of the offers from your award letters but are still short on money. You must now apply for a loan. There are so many options available to you and you want to make sure you explore them all and make the best decision for your needs. Your school will often help guide you in how to do this.

The Federal Government has a couple of different options that are available to you. The options are subsidized and unsubsidized Federal Stafford Loans, Federal Perkins Loans, and Federal Parent Loans for Undergraduate Students. Prior to applying for any of these loans you must first complete Entrance Loan Counseling. Your school of your choice will be able to direct you in which loan is best and how to apply for it.

Assuming that you do not qualify for federal loans you will then apply for a private loan. It is offered through private lenders or banks. Most offer competitive interest rates and terms. It is important to compare a lot of different offers. Make sure that the lender is aware that the loan is for school. They offer better rates and terms. The loan goes into what is referred to as deferment. This means that you do not have to make payments until you have finished school.

Comparing Loans Options

Loan Type	Grace Period	Length of Repayment	Repayment Plan
Federal Stafford Loan	6 months	10 years	Level, Graduated, Income-Sensitive, Extended
Federal Perkins Loan	9 months	10 years	Level, Graduated, Income-Sensitive, Extended
Federal Consolidated Loan	None	30 years	Level, Graduated, Income-Sensitive, Extended
Federal PLUS Loan	None	10 years	Level, Extended
Alternative/Private Loans	Varies by lender	Varies by lender	Level, Graduated, Income-Sensitive, Extended
*Information taken from Yahoo Finance

Terms and Definitions

Academic period: A time that school is measured by. Commonly referred to as a semester, or quarter. This time has ended and starts dates.

Accrued interest: The daily interest that has been added to your unpaid loan.

Aid eligibility: The difference between the cost of school and the family contribution. Also known as financial need.

Alternative Loans: Private loans will cover costs that government funded programs do not.

American College Testing: A standardized test that measures a student's educational development.

Application: Consists of personal information and details and terms of the agreement.

Borrower: The person obtaining the loan. This person is responsible for all terms agreed to.

Bursar's Office The department with in the college that is responsible for collection of funds with in the school.

Campus based aid: The school is given a fixed amount by the federal government to give to qualifying students.

Credit based loans: A loan that is made by credit worthiness.

Data release number: A four-digit number that is given to you by the department of education. It will be on your student aid report.

Default: : failure to comply with the terms in your note.

Deferment: A time when guidelines are met that the borrower does not have to make monthly payments.

Emergency loan programs: A program that the schools offer which is short-term low interest payment loans.

Federal Loans: Loans guaranteed by the U.S government.

Federal Pell Grants: Designed by the federal government to help students with financial trouble pay for college.

Financial Aid: Financial assistance in the form of scholarships, grants, work-studies and loans.

Grant: A form of financial aid that does not have to be repaid.

Holder: The place that owns the loan.

Loan: Money borrowed for a specific reason. It is then repaid over time with interest.

Master Promissory Note: A legal agreement that the borrower must sign stating terms of repayment and any interest that must also be paid.

Satisfactory Academic Progress: An eligibility requirement for borrowers to receive financial aid.

Tuition: Costs associated with the school.

Some questions to consider:

What are the guidelines to be eligible for financial aid?

You must have a high school diploma or GED

Be a US citizen or eligible non citizen

Males between the ages of 18-25 must be enrolled in select service

When should I begin to apply for financial aid?
One year before you begin college. Make sure you research all your options and complete your FAFSA form since that can be turned in January 1.

What documents do I need to complete and sign to get a loan?

A statement of Education Purpose

A Certification Statement on Refunds and Default

An Anti-Drug Abuse Act Certification

A Statement of Updated Information

A Statement of Registration Status

A Promissory Note for the loan

Where can I get a FAFSA form?

High School guidance office

College Financial Aid office

www.fafsa.ed.gov

The public library

Will the information on my FAFSA be kept confidential?
Yes. The information on your FAFSA will not be released with out your authorization to anyone.

I plan to go to school part-time. Am I eligible for financial aid?
Most financial aid is awarded to students that take 6 credit hours per semester.

After I filed my FAFSA my family's financial situation changed. What do I do?
You want to wait until you receive your SAR and then contact your schools financial aid office. Do not file another FAFSA.

We hope you enjoyed our newsletter, if you have any suggestions or comments please let us know @ education@ufs-debtmanagement.com

Newsletter 1
Rev.1
January, 2006