AVID Family Workshop

Phantom of the Opera

Paying for College

March 24, 2009

Portfolio ContentsPortfolio ContentsTAB 1 TIMELINES Chart your Course 6-12 checklists

/ Grad Plan

TAB 2 ACTIVITIES Extra Curricular Activities / Honors & Awards

TAB 3 REPORT CARDS Report Cards/ Transcripts

TAB 4 SCORES PSAT/ SAT/ ACT/ AP/ ASVAB/ Terra Nova Scores

TAB 5 ESSAYS Essay samples

TAB 6 LETTERS Letters of Recommendation / RESUME

TAB 7 SCHOLARSHIPS http://www.fastweb.com

TAB 8 COLLEGE INFO Selection Process/ Top Colleges / College Visits/ College Planner/ Travel

TAB 9 FINANCES Paying for College/ Pre-Pay / FAFSA

TAB 10 OTHER Goals/ Careers / Career Launch/ MyRoad/ Other info

SAT/ACTSAT: 02 May 2009 (International Registration Deadline 31 March 09)

SAT: 06 June 2009 (International Registration Deadline 05 May 09)

www.collegeboard.com

ACT: 13 June 09 (Registration Deadline: 08 May 09)http://www.actstudent.org/

Phantom of the Opera

Ms. Sibayan’s MS AVID

Paying for CollegeThe New Reality

From Suze Orman’s2009 Action Plan

              

The New Reality•Real estate has

decreased in value•Stock values decreased

dramatically•Credit crisis

The Good News•May 2008 Congress

passed emergency legislation

•Kickstarted the student loan market

Important changes in student loans

•Increased amounts students can borrow

•Eased the terms of repayment

How to proceed?

•Depends on variety of factors:– Your age– Age of your children– How much money you have

saved

What you MUST DO in 2009

•If your child is headed to college within four years and your college savings are in the stock market, you should be phasing it out of the market so that it is 100% out by the time he/she is 17.

What you MUST DO in 2009

•If you have a child entering college this year, look into getting a Stafford loan.

What you MUST DO in 2009

•If parents need more, consider a PLUS loan.

What you MUST DO in 2009

•Stay away from private student loans at all costs!

Your Retirement Accounts

• These must come first!• Especially important in these

uncertain times• You need that money waiting

when you retire.• Don’t divert this money to pay

for college.

Borrowing from Your Retirement?

• Never a good idea to use this to pay for another expense

• 2009 is doubly risky• Could also affect your child’s

financial aid eligibility• Don’t touch your IRA or 401K or

TSP

Be Realistic and Honest

• Seriously rethink what you can afford

• The best school is one that provides a solid education and doesn’t put you in deep debt.

• Keep an open mind.• Look at your in-state college

system• Kiplinger’s “Best College Values”

Want to start a college fund?

• 529 Savings Plan is easiest and smartest

• Earnings are tax-free• Withdrawals used for college

also tax-free• Contributions can come from

grandparents, relatives, and friends.

Want to start a college fund?

• Coverdell Educational Savings Accounts

• U.S. Savings Bonds• www.savingforcollege.com (best

site)

Already have a 529K?

• Do NOT move money out of it now!

• If necessary, shift some money within the fund to stable-value account.

Planning ahead . . .

• Under age 14 100% stocks• Age 14 75% stocks• Age 15 50% stocks• Age 16 25% stocks• Age 17 0% stocks

Adjust your portfolios now!

College is here and you don’t have the

money . . . • You have options!• STEP ONE: Your child, the

student, applies for both subsidized and unsubsidized Stafford loans

Stafford Loans

• The cheapest loan options• 5.6% -6.8% interest• Can opt to pay interest now or

later• Anyone can get the unsubsidized

loans• Freshmen up to $5,500• Sophomores up to $6,500• Juniors and seniors up to $7,500

How do you get a Stafford loan?

• MUST complete the FAFSA!• Also necessary for any school

financial aid• http://www.fafsa.ed.gov/

You need more money?

• STEP TWO: Apply for a Parental PLUS loan (also federal)

• No income limit• Can borrow up to the full

amount of college costs still needed

• Current rate 7.9% -8.5%• Can defer repayment till

graduation

Your situation changes . . .

•Contact the financial aid office immediately!

Honesty

• You must limit what you borrow to what you can truly afford

• College Board has calculators for costs of repayment on PLUS loans

Honesty

• Consider less-expensive schools

• Have the child earn some money

• Make the hard choices

Other points to remember

• Let Uncle Sam pay• Most F.A. comes from the

colleges• You must apply• Consider colleges that WANT

YOU!

What Parents Can Do

•Advocate for your child•Learn and play “the game”•Support your child

Washington University in St. Louis 2002

The College of the Holy Cross 2006

NEXT WORKSHOP

TBA May 2009See you there!