CCP Ch. 4

Terms in this set (63)

What is a scholarship?
A sum of money used to pay educational expenses awarded to students based on academic merit, students are not required to pay back loans
What is the definition of merit-based aid?
Awards through grants or scholarships based on excellence in academics, leadership, volunteerism, athletic ability, and other areas determined by granting organization, not based on financial need
What is the definition of need-based aid?
Awards through grants, scholarships, or loans based on a student's or parent's level of income, you need to complete FAFSA; lower income=more money offered
What is looked at for scholarships based on personal attributes?
•demographics
•involvement
- military
What scholarships can a transfer student apply for?
Same ones as those of a first-time freshman, but there are less scholarships and less money available
What is the criteria for scholarships for current college students based on?
(a.k.a institutional scholarships)
•maintaining high GPA
•having outstanding accomplishments
According to the College Board, what are some good ways to find scholarships?
•start by researching local scholarships
•check organizations and employers
•use a free scholarship search service (if you're asked to pay, you are being scammed)
•contact your state's department of higher education
•research institutional scholarships
What can you do now to get ready for the scholarship application process?
1. Get involved in extracurricular activities—organizations look for well-rounded students
2. Consider people u might ask for a letter of recommendation
3. Begin outline of your personal essay—think of experiences who have shaped who you are
4. Research national, regional, and local scholarship database
5. Talk to counselor(s)
6. Create special scholarship file with relevant PDF's and documents
What is FastWeb?
An online tool for finding scholarships
What is a grant, and how is it different from a scholarship?
•grants are financial awards that are usually dispensed by the financial aid office of a college or university, can be merit-based but are mostly need-based
•grants have less-strict requirements and are usually need-based, whereas scholarships are usually aptitude-based
What are the two categories of grants?
•Student-specific:
based on personal characteristics, such as race, ethnicity, gender, family background
•Subject-specific: based on a student's intended major, offered by companies, organizations, and agencies to ensure there is a good range of potential employees entering their field
What are the sources of grant funding?
•federal and state govs
•colleges and universities
•public and private organizations
What is the #1 way to apply for grants?
FAFSA, Free Application for Federal Student Aid
Which grant program is considered the foundation of federal aid offered by the federal government?
Federal Pell Grant
What are some grant programs offered by the federal government?
•Teacher Education Assistance for College and Higher Education (TEACH) Grant: students who plan to teach in public or private 1st or 2nd schools that serve low-income students
•Federal Pell Grant: foundation of financial aid
•Federal Supplemental Education Opportunity Grant (FSEOG): college students with exceptional financial need
•Academic Competitiveness Grant (ACG): provided to 1st and 2nd yr college students based on need
•National Science and Math Access to Retain Talent Grant (National SMART Grant): 3rd and 4th yr students who're majoring in physical, life, or comp. sciences, math, engineering, or a critical foreign lang., or nonmajor single liberal arts program
Where does a large portion of the money states use for grants come from?
Lottery tickets—use this money to provide need-based aid to diverse # of students
What kinds of grants to states offer?
•minority state-funded grants
•grants for low-income and disadvantaged students
•grants for students pursuing a field of study in which there is a high need for professionals
Who is considered a first-generation student?
A student who will be the first from their family (grandparents, parents, and siblings) to graduate from college
What are grants for underrepresented students?
Organizations offer grants to underrepresented students to ensure that college campuses remain diverse
- African Americans
- Hispanics
- American Indians
- Asian Americans
- those with disabities
What are some careers that have a high need for qualified professionals and therefore offer numerous grants?
- Science
- Math
- Engineering
- Nursing
- Teaching
- Technology
- Arts
What are the advantages of applying to women's colleges?
Offer generous financial aid to promote diversity and successfully guide the careers of young woman, alums contribute generously
What are some fields that women are underrepresented in?
- Science
- Math
- Medicine
- Engineering
- Technology
- Law
- Business
- receive grants for majoring in these fields
What is a student loan?
Sum of money for educational expenses that must be paid back, often obtained through the government, or can be from private financial institutions
What are the three types of federal student loans?
•Perkins
•Direct Stafford (subsidized and unsubsidized)
•Direct PLUS
How are the Perkins and Direct Stafford loans similar?
•funded by the U.S. Department of Education
•low interest rates
•apply for loans by completing a FAFSA and must demonstrate financial need
•student's college receives the money, applies it to tuition, fees, room and board, gives leftover money to student
What are the differences between the Perkins and Direct Stafford loans?
PERKINS:
- fixed interest: 5%
- grace period: 9 months
- max. amount: $27,000
DIRECT:
- fixed interest: subsidized (fed. gov. pays half of interest rate) 3.4%, unsubsidized (student pays all interest) 6.8%
- grace period: 6 months
- max. amount: $31,000
What is included in a student's award package?
Award package: the total financial aid offered to student by school, may include grants, loans(Perkins or direct stafford), and/or work-study awards
What is a grace period?
Time given before student must start laying back loan after graduation, withdrawing from college, or dropping below 1/2 time enrollment
What is a Direct PLUS loan?
Loan that grad. student, professional degree students, and parents of undergrad students may take out to pay for college education expenses
Who can take out a Direct PLUS loan and how much can they borrow?
•parents of a college student who must be either biological or adoptive parents, be a U.S. citizen, complete a Direct PLUS loan application, and have a good credit history
•they can borrow the college's cost of attendance minus other financial aid received
What are details about the Direct PLUS loan?
•interest rate fixed at 7.9%
•funds provided through college to lay for student's tuition, fees, room and board, extra is given back to parents
•borrower can begin to pay back 60 days after the loan is fully dispersed or 6 months after the borrower's child is no longer enrolled at the school
What are some details to comsider when taking out a private loan?
•can receive more money than federal loans
•interest rates vary and are higher
•loans are in the student's name and he/she is responsible for paying
•repayment terms vary, loans with shorter repayment periods usually cost less than loans with longer repayment periods
•important to look at annual percentage rate (APR) which is a sum of yearly interest and fees to be laid beyond loan amount, can make loan payments high
What is loan default?
Failure to repay a loan on which borrower has made no payments for 270 to 360 days and has not made arrangements to defer
What are the consequences of loan default?
(You are responsible for paying back student loans, even if you don't graduate)
•could be sued for entire amount of loan
•money could be taken out of your wages
•appears on credit history up to 7yrs after paying the default
•won't be able to receive additional federal financial aid until you've paid loan in full
•if you have a professional license, you may not be able to renew it
•you might not be allowed to enter armed forces
What is the Federal Work-Study Program?
•federal funded program program that helps students find part-time work through their college to pay for college expenses
•money given to college which then finds (typ. major-related, on campus) work, student receives at least min. wages
What is cost of attendance?
Total cost of attending college, including tuition, fees, books, and room and board (food, personal costs, and transportation)
List three ways you can save on tuition
•plenty of colleges you've never heard of provide excellent education without the high price tag at well-known schools
•complete GE requirements in community college—can save 50% on tuition fees
•apply to colleges with strong winter and summer programs—can cost half as much as taking same courses in fall and spring
How can you save on text books?
•buy used text books
•buy the same books online instead of at the college book store
•sell the books once your done with them
•rent books at discounted prices
When do colleges update total tuition fees on their website?
Once a year
What are different living arrangements for college students?
•living at home
•living on-campus
•living off-campus
•on-campus 2yrs, off-campus for the rest of yrs
•fraternity or sorority
What are cheap ways to live off-campus?
•close to campus
•share apartment with other college students and share rent
•buy an apartment with utilities in rent—makes it easier to budget household expense
•try to find furnished apartment so you don't have to buy any appliances
What is the most economical yet nutritious way to eat at college?
Meal plan: student pays up front for a specific number of meals in college dining halls—varies from college to college
How should you deal with the transportation of going to a out-of-state college?
•find cheapest airplane ticket prices
•don't travel too often
What are the three most economical ways to get around campus?
•walk, bike or rollerblade
•some large-campused colleges offer free bus system
•take public transit
What are some ways you can keep from getting in credit card debt?
•obtain only one credit card
•use it only in emergencies—for regular expenses, write check
•pay off balance every month to avoid paying credit card interest and fees
What is the best way to pay for monthly expenses and why?
Use cash or checks because it is your own money
What should you do with extra money at the end of the month?
Deposit it in a high-interest savings account
What are some ways you can keep technology expenses low?
•take advantage of HP Academy program to receive major discounts on computers
•Apple and Dell also offer discounts on computers
•check what discounts your college offers
•use free wifi, provided by most colleges
•install free Voice over Internet Protocol (VoIP) for phone calls
•use freeware and shareware
What are some ways to have fun and keep for in college while on a budget?
•free festivals most colleges offer
•attend college sports events
•eat at restaurants only for special occasions
•walk, bike, or rollerblade to class
•use college's recreation center facilities to exercise
What are some places your college ID can save you money?
•movie theaters
•museums
•concert halls
•broadway shows
•local restaurants near campus
•clothing stores such as J.Crew and Monaco
•auto insurance companies
•airline companies
What is a Student Advantage card?
Card purchased for a reasonable fee that gives you discounts on purchases from national chains and online retailers
What is a 529 Plan?
Tax-advantages savings plan designed to encourage future college savings, legally known as qualified tuition plans, sponsored by states, state agencies, or educational institutions
What is a Coverdell Education Savings Account (ESA)?
An education savings account for K through 12 and college expenses, yearly max. contribution limit, contributions are taxed up front, account not taxed as it grows, withdrawals are tax-free
What are the two types of 529 plans?
•pre-paid tuition plan (aka guaranteed tuition plan)
•college savings plan
What is a pre-paid tuition plan?
Allows a family to prepay all or most costs of an in-state public university education, can be converted for use at public or out-of-state colleges
•state residency requirement
•limited enrollment period
•locks tuition prices
•not available in every state
•allows only pre-purchase of tuition
•deal with a state agent
•administered by state and higher educational institutions
What is a college savings plan?
Student's family saves money for college by investing in stock market, offers several investment options (but not as much as Coverdell ESA), value goes up and down based on market performance of option selected
•no state resident required
•enrollment open all year
•does not lock college costs
•available in every state
•covers all qualified higher-education costs
•deal with a broker
•administered only by state
Where can the funds from a 529 plan be used?
All accredited post-secondary schools
•4yr colleges and universities
•junior colleges
•certain vocational schools
•certain foreign schools
What are the advantages of the 529 plan?
•money gained from investment is not taxed
•when money is withdrawn to pay for educational expenses, it's not federally taxed, and most states do not tax either
•most plans had very low min. monthly contribution requirements
•account holders have the option of contributing one lump sum, up to $65,000
•account holder maintains condo lover investment
•beneficiary (student) can be changed at any time to another family member
•left over money goes to account holder
What are some things to keep in mid when considering a 529 plan?
•any money invested that is not used for college expenses will be taxed
•having a 529 affects need-based financial aid eligibility
•enrolling in a 529 doesn't guarantee admission to college
•typically, student beneficiary is required to be 15 or younger
•although account holder doesn't pay taxes on a 529, contributions cannot be deducted from income taxes
•account holder can choose to move funds from one state's 529 plan to another's, but only once a year
Where can you open a Coverdell ESA?
-bank
-mutual fund company
-other financial institution
What happens to the money in a Coverdell ESA?
•can be invested in stocks, bonds, or mutual funds—has more investment options than a 529
•leftover money goes to beneficiary
What are the details of a Coverdell ESA?
There is an age limit for disbursement of funds
To whom should you and your family speak to before enrolling in a savings account?
Financial advisor
YOU MIGHT ALSO LIKE...
;