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[00:00:00] Okay, good morning. Let’s talk today about helping your students with financial aid offers and the college bill. Today’s webinar is going to be about an hour, so it will be worth one full PDP point for you, so make sure you take advantage of those PDP points. Um, quick, quick logistics here. You can use the live transcript, uh, the chat’s disabled, but put your questions in the q and a and I will.

Um. You know, get to those as we can. I don’t have the, uh, raise hand feature working today, so just type your questions in the q and a if you need me to stop. All right. So a little bit about MEFA. I think most of you’re probably familiar with MEFA. If you’re on today’s webinar, you’ve been probably working with us for a bit.

Um, but we are a quasi state authority here in Massachusetts, a, a independent, uh, self-financing state authority. We were created in 1982 by some colleges and universities in the state who [00:01:00] lobbied the state legislature to create an entity for a low cost loan program like MEFA. So since then, we’ve gone on.

To offer other options like saving for college as well as our education and training component, the Mefa Institute being one part of that. Um, so we do a lot of work in education, guidance and training for families, school counselors and college administrators. So here’s what we’re gonna talk about today.

I don’t really have any FAFSA updates, per se, other than it’s working well, much better than last year. So that’s good. Um, I wouldn’t be able to give you any DC updates. We’ll, we’ll leave that for another webinar. Um, but feel free, you know, to type any questions in the chat. But really we’re gonna focus on understanding and comparing the financial aid offers.

I have some great tools to show you how families make the numbers work, how they pay the bill, what are the different options available for them, and once they deposit, you know, what’s happening next, when are they getting their bill, if they need to [00:02:00] appeal, how do they do that? What do they do if they’re on the wait list?

All that good stuff. And throughout, we’ll talk about. Free resources, so nobody should have to pay to get through this process. So everything we’re talking about today is gonna be free resources. So the first resource here is going to be for you as a school counselor. So I’ll allow you to, uh, click on these links, uh, when you get the PowerPoint, but we have a whole school counselor webpage for you with all the resources you need to help families.

So I invite you to check that out. We have a new website that we launched in the fall, so get familiar with that. Within there, we have the Mefa Institute, so you can get all your PDP points, you can, uh, do your, all your record keeping there, as well as links to recordings, webinars, videos, things that will be helpful for families.

If you like a podcast, I’m gonna show you the, um, links to all of our social media at the end of a good slide that. Summarizes all of them. So you can link up with us on social media, but our [00:03:00] podcast is great. So if you like podcasts, definitely take a listen and subscribe to that. And just know that families can also set up one-on-one appointments with us if they need to, where we can set up a Zoom just like this one, and they can share their screen.

We actually have a great hotline that we did this week for families about their financial aid offers, and we gotta have another one in April. So I’ll tell you a little bit more about that later too. All right, so let’s get into the meat of the program Understanding, comparing financial aid offers. Again, for those of you who are just logging in, we are recording today’s webinar and I will share all the slides with you with the link to the recording tomorrow and the chat’s off the, the raise hand features off.

But feel free to type any questions you have in the q and a and I will get to those as we go. Alright, so first, understanding financial aid offers. It’s important for. Families as well as all, all of us who are helping families to just at least understand the basics of what they’ll see on a financial aid [00:04:00] offer.

Most of the students you’re working with should, should have at least one financial aid offer in hand at this point. March is the time where those start really coming in the door pretty quickly marching into April. Unless they applied early action or early decision, they may have already gotten those financial aid offers.

Um, even in the winter time, I. So types of aid that they’ll see on a financial aid offer will be from all different sources. So the college, the federal government, as well as maybe even the state government if they’re eligible for any of those programs. First, you’ll always see any aid that the college or university themselves are giving outta their own institutional dollars, including merit and need-based scholarships and grants.

So grants and scholarships. That’s a good stuff. That’s what everybody wants. And so they list that free money first. So we do wanna think about the free money separately from other components on the financial aid offer. Uh, because it, uh, it’s all financial aid, but it’s different types of [00:05:00] financial aid.

We wanna think of it differently. So the Fe Pell Grant, the university grants. All good stuff and we’ll talk about renewability of those, um, grants and scholarships as well. Work study is a federal program where colleges and universities are allocated dollars to use to pay for work study jobs, so the payments that the student gets working in that work study job, maybe 10, 15 hours a week or so, they can earn up to that amount in that work study job.

So in this example, you see $1,500 for the year for the work study job, which means in this program or in this offer, this student can earn up to $1,500. Now that $1,500 that they earn will come in a biweekly paycheck. Probably you don’t wanna consider this as money towards the bill in the fall and spring because they’re earning that throughout the semester.

Um, so you’re not taking that dollar amount off the bill. Uh, you’ll take the [00:06:00] grants and scholarships and loans off the bill, but not the work study that will be used to pay for some of those unbuild expenses, like books, supplies, pizza, money. All that good stuff. Uh, and there is, you know, quite a substantial amount of dollars that are spent on the unbuild expenses as well.

So students need some way to, uh, help pay for that as well. And even if the student is not, um, eligible for work study based on their family’s financial need, doesn’t mean they can’t get a part-time job on campus. There are other jobs on campus that might not be work study allocated jobs. Um, and also if a student wants to work over 1500.

Dollars for the year. Maybe they earn up to 2000. Some schools, uh, will allow students to keep working even if they surpass that amount and pay out of their own institutional dollars. So that might depend on the school and the, and the job. Um, but it’s good for students to, you know, look into that. They will have to apply for that work study job when they get on campus.

So where’s this money come [00:07:00] from? The federal government, state government from filling out that FAFSA form that goes to the feds and the state and the colleges and universities get that information back about what students are eligible for and also the colleges, uh, aid themselves. Now, if you’ve been helping students for a while, you’ve probably seen that.

Financial aid offers can look different from school to school. Um, you might get a student getting a financial aid offer in their college web portal. Maybe look at a paper, um, financial aid offer the first year. Um, they might get a paper offer every year. It might be something that the student gets through email, but just understand that.

I think counselors know this, but families are often surprised that the student really is the one getting all the emails and all the mail. ’cause they’re the one, it’s their education, their name is on the bill. Even though their parents may be helping and even running, running, uh, the show as far as the finances go, uh, the student is the one getting all those communications.

So they need to be on top of their email and [00:08:00] mail and making sure they’re looking at all of that. Now students will need to accept all or part of this financial aid offer by the college’s deadline, which is usually May 1st, our national decision day where students need to deposit at a school they were accepted to.

Um, now why wouldn’t a student accept everything on a financial aid offer? The reason for that is that potentially maybe, maybe they don’t need the federal loans that are on here. So you see on here also, we have federal student loans, the federal direct subsidized and unsubsidized loan. I have a whole slide just on that loan.

A loan. So I will talk about that. Um, but maybe a student doesn’t need to borrow. Maybe they’re fortunate enough that their cost is at a point where they don’t need to borrow, so they might decline maybe the unsubsidized loan that’s accruing interest. Um, but most students will, will be accepting most of the financial aid offer, or maybe they already have a part-time job so they don’t need the work study, things like that.

But for the most part, they’ll one, accept all, all the [00:09:00] aid depending on their situation. Now, as I mentioned, merit and need-based aid will be on this financial aid offer. So the merit-based aid, most of that is gonna come from the college or university. It’s a, it’s awarded a recognition of a student’s academic achievements or skills.

Could be an athletic scholarship, something like that. But it’s really based on the students’. Um. Talents and skills. Now, the criteria for maintaining this merit scholarship is going to be different, um, from school to school. And it could even be at a certain school, certain college, they might have different levels of merit scholarships, and each level might have, let’s say, a different minimum GPA requirements.

So the higher the amount, the higher the GPA requirement. It really depends on the college. So families, if they haven’t already done so, will wanna find out more about that. If they did get a merit-based scholarship because there are often renewability requirements, like maybe a minimum GPA or staying in a certain [00:10:00] major, something like that.

Uh, there may also be, uh, we know that in Massachusetts some students have gotten the John Abigail Adams scholarship where they get tuition reductions at the state colleges and universities. So if they’re at one of those schools that might be on the financial aid offer as a merit-based type of aid, um, that doesn’t come from the college, but most.

Most financial aid from the feds. State and colleges are gonna be based on financial needs. So most of it is need-based aid, and that’s awarded based on the family’s financial eligibility. The colleges will use the FAFSA to determine federal and state aid, and depending on the school, they may use the FAFSA information to determine their own institutional aid as well.

But as many of you are probably aware, some colleges, they have larger endowments and a lot more. Institutional aid to give out. They may have families fill out the CSS profile, so they may have done that as well to determine their own institutional aid. But it’s all based on standardized [00:11:00] formulas. Now, as you, as you’re probably aware, most families, um, aren’t gonna get a hundred percent of the aid that they might be eligible for.

So they might have a certain financial need, but colleges and universities as well as obviously the federal and state government don’t have a. Enough aid to give a hundred percent of what every family needs. So you may see gaps in financial aid offers, so they might have to come up with more than their student aid index amount that was on that fafsa.

So we’ll talk about how families can navigate that and determine, you know, what, how big those gaps are com when they’re comparing financial aid offers. Now let’s talk a little bit more about that Federal direct student loan. Um, and again, for those of you who are just logging in, we are recording the webinar, so feel free to type your questions in the q and a and I’ll get to those as we go.

So with this Federal direct student loan, many of you may have borrowed the same loan when you were in college. It might’ve been the Stafford Loan back then. Um, for me it was the Stafford Loan, but the student is only borrowed on this loan. They don’t need a [00:12:00] co-signer. There’s no credit check. It really is the only way that maybe an 18-year-old would limited to credit, maybe not even working.

Can take out, you know, up to maybe $27,000 for the undergraduate education without a co-signer and say, you know, I can’t pay you back for four years ’cause I’m in school. You know, a banker or lender is probably not gonna do that without credit. Um, so that’s why this is a good program for students to contribute towards the bill, to take on some of the borrowing, have a little skin in the game, so to speak.

Uh, but they do wanna, you know. Limit how much they’re borrowing. Um, when I talk to families about parent loans, mefa loans, I always like to remind them that the student already has this federal direct student loan, so they’re gonna need to pay that back. And if they borrow the full amount, it’s gonna be about $300 a month.

So let’s, let’s think about extra borrowing, you know, additional loans and how much the student can feasibly take on. So right now the fixed interest rate for students who are in college this year [00:13:00] is, uh, 6.53% fixed for the current academic year. Each year, the feds will announce in May timeframe what the rate will be for the upcoming year, which will be in effect on July 1st.

So every year, on July 1st, the rate changes and all new loans are gonna be under the new rate. So a student might feasibly have four different loans with four different interest rates. Now part of that loan could be subsidized, meaning interest is not gonna accrue on that loan until the student leaves school or graduates.

So it’s basically interest free while they’re in school. So that’s a pretty good deal. That’s gonna be based on family’s financial needs. So not every family is gonna be eligible for that subsidy. The rest of the loan is gonna be unsubsidized, meaning it will accrue interest while the student’s in school.

They can make voluntary payments on the interest if they want. They do not have to make payments though. But we always encourage families, you know, if you students, if you can pay those interest payments, they’re, it’s not a lot of money. Each quarter you’ll get [00:14:00] interest statements. Just go ahead and do it, because then when you graduate.

I like to tell students the interest is already paid off and all you have to pay back is what you borrowed, and it’s not gonna be capitalized and added to the principal balance. So there is a small fee. We’re still, we still see fees on these loans. Hopefully we’ll be able to, they’ll get rid of those fees someday, but there is a fee deducted from this loan.

Students will have to go through entrance counseling so that they understand their rights and responsibilities as a federal student loan borrower and sign their promissory note. Online. So they will get this information about, um, accessing the federal student loan after they deposit in the college.

They’re going to knows, okay, the student’s coming, they’ll email them the information they need to do the promissory note and entrance counseling, which is all on student aid.gov. Now, as I mentioned, there’s no payments that are due while students are in school, and there’s several, uh, repayment options that they can choose from when they [00:15:00] graduate.

Now when we look at that subsidized amount, I do wanna just point out, I mentioned the entire loan is not subsidized, even if they qualify. So if we look at that freshman year loan, it’s a $5,500 loan as the max of freshmen can borrow up to 3,500 of that might be subsidized. And then the rest, the additional 2000 or the entire 5,500 will be unsubsidized.

So then they’ll wanna calculate their balance due at each school and compare them. And I’m gonna show you our great calculator that we have to do that, where they’re basically gonna take, you know, the build expenses, the call college charges, deduct their financial aid, and any enrollment deposit they paid, and whatever’s left over, that’s the balance due.

It’s not the only amount they’re gonna need to come up with. ’cause they’re gonna have those unbuild expenses too. Um, that they’re gonna need to acco, they’re gonna need to account for. So let’s show you me a’s college cost calculator.[00:16:00]

Go. Okay. The link doesn’t seem to be working, so I am going to have to just go right online real quick for you, so I apologize for that.

Okay. So it’s right here on our website. If you go to Ways to Pay or Undergraduate Loans, you’ll find it right there. I’m just gonna scroll down to our calculator here. Our college cost calculator.

Okay, so when we’re filling out this calculator, I’m only gonna fill out one school just to show you and demo you for you how it works. But I would encourage you to do this with students if they have, you know, complicated financial aid offers and if they haven’t made their decisions yet. So I’ll just put in college a, we’ll just pretend it’s a, you know, mid-range private college in the [00:17:00] Northeast 40,000 for tuition fees, which is the build costs.

And then if the student is living on campus. They’ll have to pay for their food and housing. So I’ll put in 15,000 for that. And you’ll notice that throughout the calculator you’ll see little question marks. If you hover over those, it will give you a little bit more detail about what that line item is, uh, referring to.

So books and supplies, just tells ’em what you know, what the estimate is. Colleges should be providing an estimate for Unbuild expenses on a financial aid offer. I’ll put in 3,500 for now. And then health insurance is something that a family will want to waive if the student is insured. So every student in Massachusetts and college has to be insured, so if the family does not have insurance for that student, they’ll have to purchase the school’s health insurance plan.

Which could run about $2,000 a year. So if they don’t need to pay that 2000, they should definitely waive that cost by providing their insurance information. They’ll usually find out how to do that [00:18:00] on the bill, um, through the student accounts office or maybe on their website. So I’ll put in zero for now, assuming that the student, um, is insured.

And then if you have any other expenses like transportation or laptop, anything like that, you can put those in here as well. So I’ll just put a thousand dollars for transportation. So then if we scroll down, we can see it adds up the annual costs and I will put in 1500 for transportation. So I have a even 60,000 cost here.

And then we can put in our free money, our grants and scholarships. So all the gift aid. And I am making up numbers here. These aren’t actual, this isn’t an actual award. State grants. And then if the college gave the student any, any dollars, I would add up both merit and uh, need-based scholarships, anything the college is giving them.

Just add those up here. Then any outside private [00:19:00] scholarships, we wanna include those. If the student knows about them already. I know that at many of your schools, they won’t find out until closer to graduation what their local scholarships might be, but they may have already gotten some outside scholarships, so they’ll wanna put that in here too.

And, uh, search for scholarships online. You know, now’s the time to keep, keep pressing. Trying to search for some of those online scholarships. Do some great websites here. We did a great webinar. I think it was about two weeks ago I did it. I had 400 registrants about scholarships. So families wanna know about scholarships, so, um, definitely, you know, point them to all of our scholarship info on mefa.org.

Um, but I’ll put in, let’s say they get a $2,000 scholarship. ’cause they do have to report these outside scholarships to the college or university. And then you’ll see the calculators adding up all that free money. So when you’re looking at the school side by side, you can just, you know, easily scan and see who’s giving the most free money.

Who’s expecting me to borrow? Are they putting in any parent loans, any plus [00:20:00] loans in here? We’ll leave out the plus loans because we don’t wanna put that in here. Um, ’cause it’s not financial aid. And then we’ll put in our work study award 1500. And again, you can see the little question marks that help folks you know understand what that line item means.

And let’s pretend that the family has 20,005, 29, and they’ve decided. We’re gonna do 5,000 a year outta that, spread it out over four years. So at the end of the day, we can scroll all the way to the bottom. And that 60,000 costs, which a little, a little alarming, a little scary, is now, you know, down to 18,000 after we chip away and take out the financial aid, um, that they’ve been allotted.

Okay, so that’s the calculator. And then when they’re analyzing the results, they wanna consider, you know, what is the end price at each school? How much are they expecting me to borrow? Um, you know, are they putting [00:21:00] in, I. A $20,000 federal parent plus loan to make the financial aid offer look better than it really is.

That happens sometimes. Uh, so we wanna be on the lookout for that now. It is a four year plan that families really need to plan for if the students. Looking for their bachelor’s degree. It’s an annual process though, so they have to apply for financial aid each year. If they’re getting any parent or family loans, like a loan through mefa, they’re applying for that each year.

But they do wanna plan for four years. So if year one is barely gonna be doable, it’s not gonna get any easier years two, three, and four. So they really need to be honest with themselves, having those kitchen table conversations now before they make their deposit. And then if there is borrowing in the mix.

Is the student potentially gonna graduate school? Do they wanna be a lawyer? Do they wanna get their MBA? Are they looking at that? You know, a lot of colleges have five year plans now where you can stay an extra year and a half or so and get your master’s and bachelor’s at the same time. So, [00:22:00] you know, those things need to be taken into account as far as when is the student gonna graduate so that they can start helping payback loans and you know, how much more borrowing are they gonna take on as a graduate student?

That’s really in important to be projecting out. Um, and just thinking about, ’cause it’s really, um, a key to limiting borrowing is making the right decision upfront. So appeals for more aid students at this point of the year, they’re getting their financial aid offers and they’re probably saying, okay, these numbers are a little, little tough to digest.

Is there anything else you can do for me at the college? So we have a webinar here that I did. I don’t know, maybe. A few weeks ago. Um, and the reporting is here for families where we had some great colleges and university representative talk about their appeal process and how it works at their school, as well as just general guidance on appeals for families.

So this is something that as a financial aid, um, as a school [00:23:00] counselor, you could watch this webinar and get a lot out of it yourself. Um, ’cause it’s really the guidance that we’re giving families. So I invite you to take a look at that. Um, we do have a webinar. I have the link here, hyperlink here about counseling students with unique circumstances, and this is a Mefa Institute webinar.

So if you haven’t done this webinar, if you didn’t watch it live, you can watch the recording and still get your full PDP point for it. But we do talk about appeals in this webinar, and it is a panel discussion as well with folks from bu, Salem State and Bridgewater State, my alma mater. So definitely, you know, take a look at these resources.

You can get PDP points for this one, and we can help you with that.

Okay, so when they are doing the appeals, I’ll just draw, you know, I’ll just give you some guidance, um, [00:24:00] kinda summarizing what’s in, in the, uh, in the webinar. But they do wanna share their unique circumstances or any changes in their circumstances. Remember that they probably filled out these financial aid forms in the fall, and now it’s spring and.

We’re in a different world right now. The economy is different. Um, job opportunities, um. Different. There’s a lot going on right now with the economy. So families might, some families maybe they had a parent who worked for the federal government and lost their jobs. So a lot has changed and they do need to let the college know, particularly, you know, maybe the last one or two, that the student is still interested in what their new situation is so that the college can take a look at that information and potentially readjust their financial aid offer.

The colleges do want to help the families. They are, um, a partner in this process, so they should be reaching out to the financial aid office. Any changes in income, unreimbursed medical expenses, maybe, [00:25:00] you know, mom had a baby since they filled out their financial aid office, so they have a new dependent in the household, whatever that might be.

They should get in touch with the financial aid office to find out. What form do I need to fill out? What’s your process? Do I need to provide documentation? Typically, colleges are gonna recommend, give us a call, send us an email so we can at least hear about your circumstances, and then we can advise you what documentation we’ll need, what form you’ll need to fill out.

Maybe a school counselor might need to help them with an appeal letter or third party. Documentation about the student’s situation. So just, you know, you might need to help them with that or at least point them in the right direction. Um, and then the financial aid office will take a look at that information and make adjustments on the financial aid offer if they’re able to, and send that decision letter to the families.

But colleges would like families to have this information and know what their new financial aid offer is before they make that deposit. So now’s [00:26:00] the time to get on those, uh, appeals. All right, so feel free to type questions in the q and a. If you, uh, need me to stop, I will be happy to do that. So once they figured out, okay, this is what I owe at each school, I kind of know what I’m dealing with, trying to make that last decision, narrow down the choices here.

Then they wanna start thinking about ways to pay the bill. And at this point in the year, this is the question I get a lot from families is, okay, where can I get more free money? Where can I get more scholarships? ’cause they’ve gotten what the college can give them. They know potentially what they’re getting from feds and state government.

They need more. Everybody needs more scholarships, so there’s a lot of resources that we point families to. There’s school counselor of course, for local scholarships, any community organizations, and again, we do have a scholarship. Um. Webinar on the Mefa website as well for families that you can post on your website.

That so they can access that at any [00:27:00] time. If the parents have, um, maybe a tuition benefit at work, uh, they should be looking into that. I. Any civic or religious organizations that they’re part of that might have benefits or scholarships for their members, they should look at that. Families should never pay to apply or access scholarships.

If they’re asking for money to get free money, then it is a scam and they should steer clear. So MEFA.org has all the great free resources and good guidance on this, as well as reputable websites. That they can look at. So we did share that on that webinar as well. And on MEFA social, we’re sharing scholarship alerts all the time, so families should follow us there as well.

So savings is something that, you know, some families have, some families don’t. Most families wish that they had saved more al almost a hundred percent of families wish they had saved more. Um, but families just need to look at what they actually have and not feel guilty or terrible [00:28:00] about what they didn’t save, and just deal with the situation as it is now.

And, uh, if the number is zero, then that’s fine. They’ll just have to move forward and figure out a plan without savings, but. Maybe they have saved a little bit and every little bit counts. Even if it was $3,000, they saved, that’s books for a year or two. Um, so take a look at those 5 29 plans. Any prepaid plans that they might have taken out.

Did the student or the child, you know, get savings bonds for their christening or first birthday or something like that? Um, has a student been saving a little bit? Do they have money to contribute Maybe. Grandma, grandpa, aunts and uncles godparents, maybe they have set up their own 5 29 plans for the student.

So just try and figure out, help them figure out, okay, what have we saved? We wanna tap into that. Utilize that MEFA offers the two state savings plans, the U Plan prepaid tuition plan in the MEFA U Fund, which is the [00:29:00] State’s 5 29 plan, managed by Fidelity Investments. These slides have the phone numbers that you can go to the websites.

Just go on MEFA.org if they need help, um, with their prepaid plan. And we definitely invite them to talk to Fidelity about managing their 5 29 plan and getting that professional guidance from a certified financial planner over there on how to use that plan when they might wanna take out their funds, things like that.

Uh, have money sent to the college, whatever it might be, they can, uh, give us a call and get in touch with us for help. And if they didn’t save through MEFA, they should contact their 5 29 plan advisor. If it’s not Fidelity, I. Then we have interest free monthly payment plans. So those are plans that every college has, one or every college should have one, and they are a great way to help budget payments.

So rather than having to make a lump sum payment in the fall lump sum [00:30:00] payment in the spring, they can spread it out over time. And it is a good way if feel, if somebody really likes that monthly budget, you know, broken up into smaller bite-sized pieces. They can pay it over five to 12 months. It depends on the college’s plan.

Usually it’s a 10 month plan for the whole year. And the nice thing is there’s no interest or credit requirements on this. So sometimes I talk to families who might have bad credit and they can’t borrow or don’t wanna borrow, and this is a good way to maybe kind of stretch out what they owe if, if they can’t access credit based loans.

Um, there is usually a small fee. Typically the plans start in May, June, or July. So family’s looking to use this as part of their bill payment strategy. They’ll wanna hop on that plan as soon as they deposit it at the school and get that plan in place so they can start right away. And every college should be sending them information about this.

And it should also be on their website. They’ll probably get information about this in their bill as well.[00:31:00]

So once they’ve tapped out savings and looked at the payment plan. If they still owe money, then they might need to borrow, and most families are gonna need to borrow in some capacity, even if it’s just that federal student loan. But above and beyond the Federal direct student loan, let’s talk about other loan options to pay the bill.

And I’m not gonna get into all the little nitty gritty details about loans we have comparing loan option webinars coming up for families on June 5th and July 8th. So I definitely recommend this is a great QR code to be putting on your website for families if they need. Need help. Or if you talk to a family who says, I don’t know what to borrow, I don’t know how to shop for a loan, send ’em our way.

We can help them with that. But general tips is they do do need to know their credit history, um, or have a general idea of what their current credit score is, because above and beyond that Federal Direct student loan, all of the loans that families might use, whether it’s a Mefa loan or even a Federal plus loan, [00:32:00] do have a credit criteria component to it.

Um, so they wanna really only borrow what they need, really think in terms of that four year plan. So let’s say they’re looking for a loan through MEFA. They’ll apply for the first year and then they’ll apply again each year. Um, but they do want to take that first year loan, whatever they’re thinking of borrowing, multiply what that payment is gonna be by four, just as an estimate, so they know, okay, year one, my payment’s about $200.

I can manage that. But what if they borrow for four years at $200 a a month? Then you’re looking at $800 a month for all four loans. So they wanna make sure that they can manage that end payment after the student graduates. And just really understanding the basics about. Whether it’s a fixed interest rate, a variable interest rate, what does that mean?

Um, the repayment timeline is a deferred loan. Typically, if families wanna defer those payments, again, it’s gonna cost them money in a [00:33:00] higher interest rate potentially. And, um, just not paying, making payments on that principal interest is gonna add to that total cost. So they wanna be aware of all that, and we do guide them pretty, pretty closely and, and pretty well about.

Digging into disclosure statements and really understanding that total cost of the loan. We want families to kind of see the big scary numbers upfront before they make their decision. Now, with family loans, like a loan through MEFA, for example, the student is on the MEFA loan. The Federal Plus loan is only in the parent’s name.

Um. But there is, you know, gonna be responsibility, let’s say, on a co-signed loan for everybody on that loan. And parents, I, I do get this comment a lot when they’re looking at maybe a mefa loan, for example, they might say to me, well, you know, we’re just gonna co-sign. It’s not really our loan, it’s the student’s loan.

And I always like to remind them it’s not just the students loan. Everybody on that loan is equally responsible for the loan. And in fact, we’re usually [00:34:00] looking at a parent or credit where they borrow, or as the primary borrower on this loan because they’re the ones who, uh, whose credit is getting that loan approved.

So just keep that in mind. If they’re thinking the student might be paying all these loans off when they graduate, is that gonna be feasible based on their career goals? Um, you know, employment rates and salaries for that career, whatever that might be. They wanna be thinking about. All of it now, um, just kind of estimating and looking ahead.

So the cost of borrowing is something I mentioned that, you know, I, I don’t have my hyperlink, so let me just switch over to, um,

to the MEFA website and I’ll get to my college cost calculator real quick here. Or my loan payment calculator, I should say. So MEFA is this great loan payment calculator that allows families to

calculate. Just run [00:35:00] numbers. Just use this for estimates. So let’s say they’re looking at a $20,000 balance, they can put in that amount four years before graduation, so that the calculator will take into account those deferred loans and then they choose their credit profile. Families need at least a six 70 credit score for approval.

Let’s say they maybe have a seven 20, so they’ll put themselves right in the middle. Very good. And the calculator will calculate your um, payments for the MEFA loans. Now this is just the Meatal loan. Other lenders have different calculators, they can shop around, but this gives them the estimates for each repayment option we have.

’cause we have five. What that monthly payment will be while the student’s in school and after they graduate. So if they choose an immediate repayment loan, it’s gonna be the same payment while the student’s in school as well as when they graduate. But if they’re doing interest only or deferred, they’re gonna have much larger payments after the student, uh, graduates.

And then that total cost of the loan, really important for families and students to be looking [00:36:00] at. ’cause that $20,000 loan is not just gonna cost ’em 20,000, it’s going to be 20,000 plus all the interest that accrues on that loan. If they make minimum payments now, they can make double up payments, make lump sum payments, no prepayment penalties at all.

So we encourage families to do that, to save money. You can see, you know, the rates do go up as families push out payments ’cause it’s a higher, you know, credit risk on those loans. Uh, but NIFA’s rates range from 5.75 to 8.95. Now these are our current rates. We usually adjust the rates each June. Hopefully they’ll go down.

We’ll see what happens in June. Um, but if you compare that, I’ll, I’ll switch back over to my PowerPoint while we’re. Um, talking about the loans, if you compare that to other credit based land lenders out there, the Mefa loan is a good deal. If you look at the Federal Plus loan, it’s over 9%. Me a’s rates don’t go above 8.95.

Right now, there’s no fees on the Mefa loan. The Federal Plus loan has [00:37:00] over a 4% fee. Then if you look at other private loans, let’s say through for-profit lenders, banks. You are looking at double digit interest rates for families that are getting maybe a 7% rate with MEFA. So very important to look at all their options and to shop around, um, to make the best decision.

Sorry about that. Let’s see here. Okay, so when they’re looking at their balance due 20,000 in this example. There’s not one way to do it. We’ve talked about savings, past income, present income through payment plans, maybe looking at future income through borrowing. In this example, we’re using a combination strategy of all three, so they owe 20,000, and the first thing I’ll ask a family if they owe 20,000 is how much can you afford per month?

If they say, I can afford $200 a month, then we’re probably not gonna be able to put anything on a payment plan [00:38:00] because it’s not gonna get ’em very far. They’re probably gonna need to borrow most of it if they don’t have savings. However, this family has said to me, I. And if they say I can afford 2000 a month, then they don’t need to borrow it all.

They can put it on a 10 month payment plan at 2000 a month for 20,000. Um, but this family has said, I can afford $600 a month. So we’ve put some with savings. You know, students saved a little bit. Parents maybe saved 16,000. So they’ve said, I’m gonna divide my. 5 29 up into four years and do 4,000 a year over four years.

So there we go. $5,000 off that bill just using savings. Then we’re gonna do 500 of that $600 affordable payment on a payment plan. So 500 a month over 10 month plan at that covers $5,000 towards the bill. So there we go. Looking at savings and payment plan. We’ve chopped our bill in half. We still need to borrow that $10,000 that’s left at a hundred dollars a month on the loan payment, but at least we chopped our bill [00:39:00] in half and we’re looking at 10,000 versus just putting it on on a $20,000 loan.

We don’t want families to start with borrowing. We want them to use that as a a very last resort.

And then I do have a quick question here that I wanna answer, um, live before we get into questions at the end. Question about loans. Do you have options for grad, for after graduation loans? I think they’re talking about graduate school loans. Um, but if not, you know, correct me in the q and a. We do have graduate school loans for students, um, when they get onto graduate school.

Um. If students are having any trouble or family’s having any trouble paying those back, you know, we definitely encourage them to work with our loan servicer. Um, but the payment periods are based on the loan that they choose either a 10 year or 15 year loan. So feel free if anybody else has questions to type those in the q and a and I will be happy to, uh, [00:40:00] answer those.

Okay, so the question really was are there loans for families having a tough time paying loans back? We wouldn’t wanna take out a loan to pay off another loan. Um, what they would wanna do is work with the lender that they have to try and make payment arrangements if they’re having trouble. The nice thing about the federal student loans, um, is that they can.

You know, they have lots of repayment options. There’s forbearance, so it should be pretty easy for the student to manage those. But if the family has taken on, you know, extra debt that they can’t afford, then they, you know, once they get into credit, credit trouble with loans, then they might not be able to refinance ’cause they might not have good credit.

So they really wanna think about what they’re doing now before they start getting themselves into that debt, um, that they might not be able to, to manage. Okay, so what’s next? If students haven’t applied for financial aid, now’s the time to get them on that fafsa, get them to fill that out. [00:41:00] Even if the family, the student can only use that $5,500 federal student loan, they still need to file that FAFSA form, the deadline for aid and the state of Massachusetts through, uh, the Office of Student Financial Assistance is May 1st.

So they gotta get that FAFSA filled out if they wanna be considered for state aid. Federal aid, like the Federal direct student loan is available throughout the year. But, but get those FAFSAs filled out now so that they can, um, you know, get a plan in place. And payment plans are open throughout the year.

They can take out loans throughout the year, private loans through MEFA. So some families might say, oh yeah, I’m gonna put all in a payment plan and maybe fall term, you know, comes and goes and. They’re saying, oh, you know, these payment plan payments are a little, are a little steep, I might need to borrow and not do so much payment plan for the spring semester.

So sometimes that happens too. Um, that families can, um, do that. So. So the timeline right now, they wanna pay that enrollment deposit by the [00:42:00] college’s deadline of May 1st once they know what school the student’s going to. Now’s the time for students and families to be going on college visits. One more time.

Go to those accepted student day programs. Um, we have a bunch coming up in April. I know I’ll be at Curry on April 5th talking to families about how to bail the bail. And my coworker Sean, will be at. Endicott on the fifth, April 5th. So some schools have financial aid programs at their accepted student days, and it is a good day, a good time to see that school.

One more time. You know, your school counselors, I don’t have to tell you that they should see the school more than once, um, if they can get there, but. Is a good time. Those accepted student days are great for asking all these questions that we’re talking about about appeals. How do they apply outside scholarships, things like that.

The fall semester bill, depending on the school, will be coming in June or July and will be due about three to five weeks later in July or August. Now, if they’re applying for loans above [00:43:00] and beyond the Federal Direct student loan, they’ll wanna give themselves a two week cushion before the bill is due for a number of reasons.

Even though, let’s say with a ME loan or even a plus loan, it’s an instant credit decision. They can get that done in 10, 20 minutes, apply for the loan, do the paperwork online. But let’s say they had a payment, uh, credit freeze ’cause they had, um, identity theft and they forgot to lift their credit freeze on their credit report.

That might delay them a little bit. Um, or they have a identity theft or something is on there that might, uh, have an impact. So they just don’t wanna be any surprises the day before the bill’s due. And as I mentioned before, set up those payment plans as soon as possible according to, uh, the school’s, um, deadlines.

Now a word about the wait list. I know I see a couple questions in there. I’m gonna get to those in just a minute ’cause we only have a few more slides left and then I’ll just, I. Move on to questions. Um, so a little bit about the wait list. As, as school counselors, you know that many students don’t ever get accepted off of a wait list.

[00:44:00] Some schools have a very long wait list and they don’t accept any students offered, or they might accept a couple. It really depends on the school. Um, but if a student is on the wait list and it’s the school that they really wanna go to, they definitely want to, um, let the school know they’re still interested.

There’s a. Formally accept their spot on the wait list. If it’s May 1st or May 1st is inching up and they haven’t heard about getting off the wait list. They do wanna deposit at their second choice school. They’re accepted to knowing that if they get off the wait list after May 1st, they’ll lose their deposit at the other school if they don’t go there.

Um, so it is kind of a, a waiting game right around that May 1st deadline. It’s a little tricky, but, um, they do wanna do that. ’cause they don’t wanna lose their spot if they don’t get off the wait list. Now, if they wanna stay on that wait list, formally accept their spot, find out from the college this, this will be a good decision maker.

Whether the student is still interested in the waiting list is whether or not the school will [00:45:00] give them the same amount of financial aid off the wait list as they would for students who were accepted. Any, you know, for regular admission or early decision or early action, some schools might not give as much financial aid.

Some schools will give the same financial aid if you get off the wait list as if you were accepted early. It really depends on the school, but that’s critical because if the school’s very expensive and they say, you know, we don’t give students on the wait. We, we really only take students off the wait list that don’t need, might not need much financial aid.

Um, then, you know, that school may or may not be a possibility. Now with that said, let’s pretend that the school said, yeah, you’ll get the same financial aid if you get off the wait list. Make sure they’re in touch with admissions, update the schools, the grades, test scores, accomplishments, awards, anything like that.

The interest in the school is still active right now as part of the admissions process. And, uh, you know, keep in touch with the school over social media [00:46:00] and, uh. Some schools, you know, especially elite schools, um, you know, very competitive schools. I do have a good friend, best friend who had a student who applied for a school out in California, um, a top tier school.

And when they were on the school tour the fall senior year, the student guide said, nobody gets off the wait list at this school ever. I. Nobody gets off the wait list. So they kind of went into it. Okay. And then of course she got on the wait list at that school and they’re a little like, oh geez, she might not, she probably isn’t gonna get off.

’cause that student said they don’t get off the wait list at this school. But guess what? She got off the wait list on May 2nd, the day after they deposited at a different school. But what was great about that is that. The financial aid office worked quickly with the FA parents to, you know, get them the financial aid offer, get the information from the parents that they needed to quickly be able to make that decision.

And she’s at that school two years in and [00:47:00] loves it. Um, did lose that deposit at the other school, but it is something, you know, it’s different for each student and each school. All right, so wrapping it up here about free resources. We want you to know what’s available for families so that you can spread the word.

The financial aid office is their number one resource at this point in the process. They will be able to answer all their questions about their financial aid offer, how they came up with that financial aid offer, how they might appeal, is there anything else that they can do, um, to help the family, particularly if you’re looking at.

Um, two financial aid offers from two schools that cost about the same. They might be competitor schools and school A gave a lot more money than school B. It’s the same student, same cost. It’s good to ask school A that the student, um, you know, or school B, where they didn’t give as much money. You know, how come you know, this school gave me this much and you only gave me this amount and maybe there’s something that school B’s missing, um, and they weren’t aware of.

So just. Talk to the [00:48:00] financial aid office, you’re gonna have to report those. They’re gonna have to report those private scholarships. Um, now with private scholarships, I’ll just send out a quick word about that. Most colleges you can assure families or you know, guide families and students. Most colleges, when they look at out outside private scholarships, they have to apply it to the financial aid.

They’ll apply it usually to do the least amount of harm to the student. So they might apply it to a gap in the financial aid offer if there are no gaps, if that’s paid, they might reduce the student’s unsubsidized loan. Um, so they’ll do things like that versus just swapping it out for their own funds.

But it is good to find out, especially if it’s a student who’s expecting a lot of outside scholarships to know how the school is gonna treat those outside scholarships. If the student is at a school, I’m using Williams. This first school that’s top of my mind that meets full need. They have a hundred percent of their need met and maybe they don’t even have any loans.

And obviously something’s gonna have to come out of the award to put those private scholarships in. But [00:49:00] that, those situations are few and far between where most students, so it’s just good to know what type of student it is and what type of um, program they’re looking at. So again, you’ll get these slides so you can click on these QR codes, offer up all these plans to your families.

All these webinars that we have. I mentioned that financial aid offer hotline. We did one on March 19th, and we had, oh geez, I think we had about 140 registrants. I think we had about 40 families show up approximately throughout the night from five to 7:00 PM and it’s just like the FAFSA festivals that you may be familiar with, where they log into a Zoom meeting.

We put them in a private zoom. Myself or a college or someone else at MEFA and they can share their financial aid offers. I, I go, I share my screen and I show them the college cost calculator. I fill in the info for them, or I might do the loan payment calculator and it’s like having an in-person one-on-one meeting, but on the [00:50:00] screen.

So it’s great. And then we have our loan option webinars as well here that you can, um. Provide for families. So here’s the social media links for you. Get, get connected with us on LinkedIn from a, from a professional standpoint, um, but social on X, Twitter, uh, Facebook, Instagram. We’re always posting scholarship alerts, webinars like this one, uh, for families on loans.

All those good. Um, uh. Programs that we have, but also the MEFA podcast, I mentioned that earlier. If you like podcasts, I think you’ll, you’ll, you’ll like this one too. All right, so here’s our phone number. Email for families, for you, for school counselors, K12 [email protected]. Be in touch with us at any time.

Uh, we’re here to help. And with that, I want to invite everybody to put in their questions, and then I go in the q and a and see. What we have out there now, if you have [00:51:00] to drop off, again, we’re recording this, so we’ll email it to you. I wanna thank everybody for coming. I know you probably have to get back to, uh, helping students, but let me, uh, go into the q and a and I’ll, I’ll answer any questions that we might have.

So, let’s see. Do you have any take on what will happen with student loans and the new administration with changes, cuts, department of Ed are loans safe, Pell Grants, all that good stuff? And I can’t give you any answer, any answers. I’m sorry, Sarah. ’cause I don’t know, we, none of us know, even probably folks that are working at the Department of Ed don’t know what’s coming.

Um, so we’ll just have to stay in touch with the news. Keep, keep on top of what’s going on. If you’re part of any, um, professional associations, hopefully there’ll be like the Chronicle of Education. Higher ed has a great, you know, that’s a good subscription. Inside Higher Ed is a good subscription. You know, just start reading those professional.

Um. Documents, maybe get on LinkedIn and you know, connect [00:52:00] with college folks that you might know that might be sharing things. Um, NASFA is the National Association of Student Financial Aid Administrators. I. If you, um, connect with them on LinkedIn or follow them on social, you might be able to, you know, get highlights there.

So just, you know, try and stay on top of the news. We don’t know anything yet about what’s gonna happen with the Department of Education or Federal Aid period. Um, nobody, nobody at MEFA is, or me particularly, is not, um, in the loop, uh, on that. So, I’m sorry I can’t give you better or more hopeful answers ’cause I really don’t have any.

Uh, but let’s. Let’s hold out, hope that it won’t be as as bad as how we might, um, as what people might be fearing. Okay, and I have another question here. Uh, do you ever have supports for families who can get in-person help for completing the fafsa? And Mass edco is where we send families who need in-person help, like not just on a [00:53:00] screen, but.

In a building. Um, and they have spots all over the state where families can make appointments and go. And they have a lot of bilingual, um, counselors as well. So I would definitely encourage you to start connecting with Mass edco. We have links to them on the MEFA.org site. That is where we send families who need help one-on-one.

Um. Of course, you know, throughout the year we have FAFSA programs that they can get the same type of help, um, on the, on the computer through Zoom. But a lot of people like to have their documents and, you know, get help one-on-one. So, uh, there are those services through Mass Ed Co. All right, I don’t see any other questions, so I am going to stop sharing my screen and end the webinar for everybody.

Uh, but I just wanna invite you to get your PDP points. Don’t forget to get those for the webinar today. And, uh, give us a call if you need help or if your families need help with anything. So have a great day, everybody. It was [00:54:00] nice chatting with you and, uh, let us know if you need anything. Thank you.