planning for your education investment: developing a tuition repayment strategy

Strategizing Your Educational Investment

Using Alternative Funding to Pay for College

• I am a strong believer that pursuing a college degree is the best investment you can make

• I have been working in the financial aid field for 7 years counseling students and their parents on their educational investment choices

• I am a member of the Minnesota Association of Student Financial Aid Administrators and the Minnesota College Personnel Association

Who is Oana Zayic?

• I have an MA in English Literature and a Graduate Certificate in Industrial and Organizational Psychology which I managed to fund through an excellent scholarship offered by my employer- Rasmussen College

• I have been working for Rasmussen College since 2008 as a Student Finance Officer

Today’s presentation will focus on two major aspects:

1. Overview of current federal loans and grant funding

2. Alternative funding options

Agenda

• Debate and changes in the US Congress

• President Obama talks about affordability and career outcomes

• The average debt of an undergraduate student is between 30,000 and 35,200

• The question you would ask yourselves would be:

– “How can I get a quality education and avoid getting deep in student loan debt?”

Overview

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Got a Question? Just Ask!

• Financial aid is a large term that covers several types of funding such as:

– Loans

– Scholarships

– Grants

– Employment Benefits.

Types and Sources of Financial Aid

• Sources of financial aid include:

– The Federal Government

– States

– Institutions or Employers

– Private Parties

• Title IV of the Higher Education Act of 1965 as amended authorizes the federal aid programs we now have in the forms of loans and grant money

• To apply for federal financial aid complete a Free Application for Federal Student Aid or FAFSA

• For those who qualify, your financial aid package could include:

– Federal Direct Stafford Loans

– Federal Pell Grant

– Potentially work study funding

Federal Loans and Grants

• Federal Direct Loans

– Repayment of loans will start 6 months after the last day of attendance

– Federal loans have a current interest rate of up to 3.68% not to exceed a cap of 8.25%

– Maximum amount an undergraduate student can receive while pursuing a degree is $57,500

• Pell Grant

– Largest gift aid program administered by the US Department of Education: it is the foundation of a student’s financial aid award

– A need-based program for which you qualify if your EFC is anywhere between $0 to $5081 and you don’t already have a bachelor’s degree

Federal Loan and Grants - continued

• Pell Grant

– Pell grant has a maximum eligibility of 600% over the time a student pursues an undergraduate degree

– For a student who qualifies for maximum Pell grant amount per award year, the 600% would be the equivalent of $33,876 based on maximum award year Pell grant eligibility of $5646

Pell Grant (continued)

• Find out from the very beginning what the total cost of your program of studies will be

• Make sure you know exactly how much you will be borrowing in student loans and have a very good idea of the amount of your future monthly payments

• Check your loan debt periodically by visiting the National Student Loan Data System at www.nslds.ed.gov

• Create a personal budget that will include your monthly income and your detailed monthly expenses.

• Try and include half of your anticipated loan repayment amount in your expenses – it will get you in the mind set of preparing for loan repayment.

How to Be a Proactive Consumer/Borrower

http://www.nslds.ed.gov/

• Scholarship is a broad term that has a triple usage : – private scholarships, merit based scholarships, and need based scholarships and grants

• Private scholarships: – Private scholarships facilitate choice and affordability for students of varying income levels – Providers of private scholarships are:

• community foundations • service and fraternal organizations • corporations • independent foundations • scholarship funds and educational trusts • individual donors • research centers, associations, societies and other national membership organizations,

local organizations.

Scholarships – Your Search

• Have a set of key works you would use in your search • Use scholarship websites where you can find comprehensive lists • Know exactly the type of scholarships you plan on applying for • Be careful and avoid SCAMS • Check the credentials of the organizations you are looking into and

make sure it is a real entity and not a fake. • Treat the process with dignity, respect and thoroughness

Your Search – Tips for Success

Scholarship Search –Key Phrases

Key Phrases:

• “college scholarship for non-traditional students”

• “Scholarships for non traditional students”

• “scholarships for older students returning to college”

• “scholarships for working adults”

• “scholarships for distance learning students”

Scholarship Websites for Your Search

• An employment benefit in which both employee and employer stand to benefit greatly

• From a HR perspective, tuition reimbursement programs attract and retain talent • Examples of employers who offer a generous tuition reimbursement program: UPS,

Starbucks, Deloitte, JPMorgan Chase, Home Depot, AT&T, Gap, Best Buy, Target, Staples, Ann Taylor, Chevron, TGI Friday, McDonalds, Burger King, Charming Shoppes (Lane Bryant’s parent company)

• As a beneficiary of the ERP, you can exclude up to $5250 of the benefits each year from your taxable income. Your employer will not include the amount on your W-2s.

Tuition Reimbursement or Tuition Assistance Program

• Let’s assume you have recently been hired by Starbucks but you are not aware whether the company would reimburse you for your classes. Where would you start your research?

– In your manager’s office

– Contact the company’s HR department

– Visit the company’s website

– Starbucks will pay for courses and programs that would lead to the professional development of the employee with major focus on business development skills.

Tuition Reimbursement: My Starbucks Experience

• Tuition reimbursement programs are hosted by the company’s Human Resources department – reach out to your human resources generalist and see if you meet the requirements of the

program. – have a very good understanding of the tuition reimbursement policy

• Rasmussen College is one of the few colleges that will offer tuition reimbursement students an

alternative to paying up front – The Tuition Deferral Program at Rasmussen College offers its students will postpone the payment

for the quarter until after the quarter ends thus giving students the time to submit their grades to their employers and receive the reimbursement.

Tuition Reimbursement (continued)

• In this presentation I tried to show you that:

– there are alternatives to federal loan borrowing

– if you put a little bit of effort into it, you can make things happen

– YOU are in charge of your financial wellbeing and your academic success

• You can contact me at:

– [email protected]

– Find me on linkedin

– Find me on facebook

Conclusion

mailto:[email protected]?subject=SME Showcase Questions

http://www.linkedin.com/pub/oana-zayic/17/350/2b6

https://www.facebook.com/oana.zayic