PSC-ED-FSA-TISD
Moderator: Christal Simms
02-18-16/4:00 pm CT
Confirmation # 6303611
Page 1
PSC-ED-FSA-TISD
Moderator: Christal Simms
February 18, 2016
4:00 pm CT
Coordinator: Welcome and thank you for standing by. At this time all participants are muted all throughout the duration of today's conference call. Today's conference is being recorded. If you have any objections, you may disconnect at this point.
I would now like to turn the call over to your host, Ms. Maisha Challenger. Your line is now open.
Maisha Challenger: Thank you so much. Good evening, everyone. I want to welcome you to our FSA webinar series. Tonight's webinar is going to be Financial Aid 101: Tips on Getting Money for College.
So I'm sure a lot of you out there were hoping our high school seniors. You may currently be in college. You may just want some information about tips on money for college. Well, this is the webinar for you.
Today we're going to talk about a lot of different topics, as it relates to financial aid and pursuing your post-secondary education. So today, I want to talk to you a little bit about Federal Student Aid programs.
We're going to do a FAFSA overview. Some of you have heard that word FAFSA, but you may not know what it means, or you know it's an actual application, but what do you need to do? So we're going to do a quick FAFSA overview, when and how to apply.
And then we're going to talk Federal Student Aid resources, followed by Q&A. My name is Maisha Challenger, and I work for Federal Student Aid. And I want to make sure you get a lot of great information today.
So before we begin, it's important to understand where you can look for money for college. There are many sources of money for college. The federal government, where I work, does provide financial aid.
The state also provides aid. The college and university that you attend provides aid, as well as foundations, private foundations, employers, or also professional or service organizations. So I always like to say there's federal money, there's state money, there's institutional money, and there's scholarships.
So scholarships, I'm sure some of you are familiar with, where that's money that is out there for you to go to college at no cost. So it's important to know that there's lots of different aid out there for you to take advantage of.
I want to do a quick myth - so a couple of myths about financial aid, because there's a lot of different information out there that people believe that may not necessarily be true. So here's a myth that you may have heard. The form is too hard to fill out. That's that FAFSA form that we're going to talk about, the reason that we're here. Do you think that's true or false?
Actually, the form is not hard at all. The FAFSA form is easier than ever to fill out. You fill it out online at www.fafsa.gov. Okay? The FAFSA form is easier than ever. There's skip logic so there aren't a lot of questions.
The questions that you answer are based on how you answer or put in information. There's something called skip logic that we use. So, again, the FAFSA form is easier than ever and don't think it's hard, because it's not.
Here's another myth. My child cannot receive financial aid, because I'm currently in school receiving financial aid. If there's some of you parents on the line, and you're not sure about that, people think, well, if my parents are receiving aid, I can't. What do you think? True or false?
The reality is, just because a parent is receiving financial aid, doesn't mean your child is ineligible. Both the parent and the child can both receive federal student aid. So don't be dismayed if you are receiving financial aid, as the parent. Your child can also receive financial aid.
Here's another myth. My parents make too much money, so I don't qualify for financial aid. That's a big one. A lot of people are worried that their parents make too much money, so they don't qualify for financial aid. What do you guys think? True or false?
There is no income cutoff to qualify for Federal Student Aid. So here's the reality of the situation. Your parents may make a certain amount of money. Everyone qualifies for some form of financial aid. We're going to talk about the various forms of financial aid from the federal government.
There's something called grants and loans. So the reality is, your parents make a certain amount of money and they may qualify for loans, but your parents may make another amount of money and qualify for grants. Again, everyone qualifies for some form of financial aid, it just depends on the type of aid that you may receive. So, again, there's no income cutoff. Remember that.
And here's the final myth. This is a good one for you students out there. What do you think? Only students with good grades get financial aid. What do you think? True or false? And I'm looking at the Q&A box. So definitely share there if you need to, and if you have questions, please put them in there.
That is false. That's absolutely right. So while in high school, your grades are not a factor in qualifying for federal aid. However, once in college, and we're going to talk about that, you do have to maintain a certain GPA. So while you are in high school and applying for financial aid, your grades are not a factor. That's great news.
So let's talk a little bit about the financial aid program that the federal government offers. Before I talk about those programs, I want you to look at the number on the screen. There's more than $150 billion -- do you know how many zeroes that is -- that's nine zeroes -- available annually in federal aid to help students pay for college.
Our Federal Student Aid programs are in the form of grants, loans, or work study. And we're going to talk about each of those programs are. But, again, $150 billion is a whole lot of money that people don't always take advantage of, and we want them to.
So let's talk a little bit about grants. Grants are - does anyone know what types of money grants are? It's free money. It's money that does not want - that does not have to be repaid. Most people want to receive grants when they go to school.
The federal government offers four grant programs. Some of you have probably heard of the Pell Grant, right? The Pell Grant is the grant that is for individuals who have the most need. It's for undergraduates with financial need. It's our bedrock grant.
The maximum amount for Pell is actually $5,815, okay, for this year. FSEOG, that's another grant. We love acronyms here at the federal government. It's the Federal Supplemental Educational Opportunity Grant. Most individuals that may be Pell eligible also may receive FSEOG.
And a lot of people don't know that if they want to go onto the field of teaching, the governments offers a TEACH Grant, which is awesome. It's for undergraduate and graduate students. And once that student has completed their degree, the student must agree to teach in a high-needs field or at a low-income school. Again, there are stipulates with the TEACH Grant, but it is a grant that can be offered.
And then, finally, the Iraq and Afghanistan Service Grant is for students with a parent or guardian who died after the events of 9/11, as a result of serving in the Iraq or Afghanistan War. Okay? That grant may be for someone that you know or may apply to you, but it is available. Again, money that does not have to be repaid.
So now let's talk about loans. I always ask, and I want you guys to put in the Q&A, what do you think? Are loans good or bad? Let me see what you guys have to say. As I wait for some of your - it depends. I like. Good. Both. Good. Okay. I love that you guys are interactive.
So here's the thing. I always say that loans are an investment, right? The reality is, when you're going to school, we talked about grants, but you may have to take out some loans. So we always say that loans are available, and there are some programs that we have.
You only want to take out what you need, because loans have to be what? Repaid, right? They do have to be repaid. So, after you are done with school, that money has to be repaid. And so it's important to understand that, even though you're taking it out, you do have to pay it back.
The federal government offers a variety of different loan programs. So here's the key. There are two loans. We call them our Direct Stafford Loans, that are called subsidized loans and unsubsidized loans. When you all think of loans, what word comes to mind? Most people say debt, but it's interest, right?
There is interest that accrues on the loans that you borrow from the federal government. Here's the different between subsidized and unsubsidized. And I like to share this with folks. Subsidized is where the government pays the interest on the loan. Unsubsidized, with the U in unsubsidized, means you’re responsible for the interest on the loan.
So tell me, you guys, in the Q&A box, do you want sub or unsubsidized loans? What do you guys think? Let me see what you guys have to say. The reality is most of you - exactly. You want subsidized loans.
The reality is, the school is going to offer you unsubsidized and subsidized loans while you're attending. So it's important to understand the difference. Subsidized loans are also based on financial need. Unsubsidized are not. So it's important to realize that.
There's also something called a Perkins Loan, where the institution is the lender. The unfortunate thing of Perkins is, there are no more new disbursements of Perkins as of September 30 of last year. There are individuals who already were receiving Perkins that can grandfather in, but that loan is no longer. There are no new disbursements. So that loan, unfortunately, is going away.
And then your parents. Your parents can take out a loan on behalf of you while you're in school, if you need loans. The parents do pay the loan back, and the loan is also based on credit. So for the parent - we call it the parent PLUS loan. That is where the parent will pay the loan on behalf of the student.
The student is not responsible for that loan, and the parent has to pay that back. So, again, those are our loan programs. I did talk a little bit about subsidized and unsubsidized, but this is another chart that really talks about who it applies to and the amounts that they are up to.
So, again, as I mentioned, and this is key, you're going to see this when we talk about - we're going to talk a little bit later about your financial aid award letter, what will be listed. And subsidized and unsubsidized loans will be there.
We talked about interest. Remember, I said earlier what word is affiliated with loans? Interest. There are interest rates affiliated with each of the loans that I've discussed earlier. And those interest rates are for the month of July 1, 2015, through June 30, 2016.
So these are the interest rates. For Perkins, it's 5%. For federal Stafford Direct Loans, we talked about, for subsidized, it's 4.29%. And these are fixed rates. And unsubsidized is 4.29%.
And then, for the PLUS loan, which is for the parent, and actually the graduate student that may want to take out a loan, it's 6.84%. Now these loans, or these amounts, will be active or current up until June 30 of this year.
Congress is the entity that decides what those loan amounts will be. So we want you to stay tuned, because those can change every year. So it's important to mention the interest rates, because that's how the interest will accrue on your loan.
And then repayment, I just want to talk briefly about that. A lot of students and parents maybe may think once I'm done with school, I've got to pay back all my loans in one lump sum. That's not the case. There's a grace period, and then there's a repayment period.
A grace period, where, for example, as you can see on this chart, for your Stafford loans, you have six months after school, okay? So it's important to understand that you can - there's a grace period. The loans are not due right away.
And you don't have to pay it all back in one lump sum. There are repayment plans that you can enter in with federal loans that will give you a monthly payment. And we have a variety of different repayment plans available. So, again, don't be dismayed. We don't want it all back right away, okay?
And then work study. What work study is, is you work part-time to pay off your college and education expenses. Work study is a check on the FAFSA form. There is a specific question that asks you, do you want to be considered for work study, yes or no?
We encourage you to always say yes, because, again, that's money. It's financial aid that you can use for whatever you want. So you can use that to pay off tuition. You can use that to buy a computer. You can use it for whatever you need.
But, again, it goes towards your educational expenses. It can be off-campus or on-campus, and, again, it is part-time. I'm sure some of you out there listening may have participated in work study, and I hope it was a wonderful experience.
So we've talked about the three programs that the federal government offers: grants, which do not have to be repaid; loans, which we know are an investment, right, but do have to be repaid; and then, work study, where you work part-time while you are attending school.
So how do you get access to all of this money? Remember, how much money is out there? One hundred and fifteen billion dollars. What you have to fill out is the FAFSA. I know it's a hard word to say, but if you say it three times, FAFSA, FAFSA, FAFSA, you can get it.
So it's an acronym. Let me see if you guys know what it stands for. In the Q&A box, you guys tell me. What does the first F stand for in FAFSA? Uh-oh, I just told you. It's free. It's not federal, it's free.