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7 - Chapter 7 Copyright© 2011 Money Education LLC Chapter...

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Copyright© 2011 Money Education, LLC Chapter 7 Chapter 7 Copyright© 2011 Money Education, LLC Chapter 7 2 Introduction Planning for a college education is one of the top two or three goals for most families. Planners should be able to answer client questions regarding: How much is current tuition? How much is tuition expected to increase in the future? What other costs are associated with a college education? What type of financial aid is available and where to locate information regarding financial aid? What are the tax advantaged plans, deductions, and credits available for education funding? Copyright© 2011 Money Education, LLC Chapter 7 3 Current Education Costs Is it worth the cost? Average annual earnings (for workers age 25 and older for 2008): High School Diploma - $33,800 Bachelor’s Degree - $55,700 Masters Degree - $67,300 Doctorate Degree - $91,900 Professional Degree - $100,000
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Copyright© 2011 Money Education, LLC Chapter 7 4 Tuition and Other Costs Average tuition and fees for 2010 to 2011 Public University In State Tuition - $7,605 Public University Out of State Tuition - $19,595 Private University Tuition - $27,293 Total cost of attending college is significantly greater than just tuition and fees. It is not uncommon for the total cost of education to be twice the amount of tuition and fees. Copyright© 2011 Money Education, LLC Chapter 7 5 Tuition Inflation (per year) Copyright© 2011 Money Education, LLC Chapter 7 6 Tuition Inflation (Cumulative)
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Copyright© 2011 Money Education, LLC Chapter 7 7 Financial Aid Is an important tool for families that are not adequately prepared. Is administered by the U.S. Department of Education. 79.5 percent of all full-time undergraduate students received some type of financial aid in 2007 – 2008. Information about financial aid is available online, at high schools and college campuses. http://studentaid.ed.gov/PORTALSWebApp/students/english/ind ex.jsp http://wdcrobcolp01.ed.gov/Programs/EROD/org_list.cfm?catego ry_ID=SHE Copyright© 2011 Money Education, LLC Chapter 7 8 Financial Aid Process Is initiated by completing the Free Application for Federal Student Aid (FAFSA). Is used to determine a student’s eligibility for all types of financial aid. Is used to determine the Expected Family Contribution amount (EFC). Federal Methodology determines the EFC using one of three methods: Regular Formula: Income and Assets Simplified Method Automatically Assessed Formulas Copyright© 2011 Money Education, LLC Chapter 7 9 Financial Need vs. EFC The EFC is subtracted from the cost of attendance at a university and can include living expenses. Information contained in the FAFSA can be provided to universities.
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Copyright© 2011 Money Education, LLC Chapter 7 10 Grants Grants are money provided to students for postsecondary education that does not require repayment.
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  • Spring '12
  • afda
  • Academic degree, Income tax in the United States, 529 plan, Coverdell Education Savings Account, Money Education

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