Financing Your Education

Exploring Your Options

The Student Protection Unit (SPU) was formed within the Department of Financial Services to enhance consumer protections for New York students and help them build financially sound futures.

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The goals of the SPU are to:

• Protect students from fraud and misrepresentation by taking appropriate action, such as enforcing applicable laws and encouraging industry transparency.
• Provide unbiased and objective information on industry practices and the functions of student-related financial products.
• Educate student consumers and their parents regarding available financial products and services and empower them to make informed choices.

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Student Protection Unit

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• Studies have shown that college graduates can expect to earn substantially more over their lifetime as compared to high school graduates.

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• However, the average college senior graduated with $30,951 in debt, which translates into payments of $300 a month on the standard 10 year repayment for student loans.

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• If you have student loans, you are purchasing your education and financing it with your future income.

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• By making smart decisions about how much you borrow and the type of loans you take, you can substantially improve your future financial position.

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The Costs and Benefits of College

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Financing Your Education

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The Free Application for Federal Student Aid (FAFSA)

• Once you have made the decision to apply for admission to college, you must complete the FAFSA to apply for federal student aid.

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• To complete the FAFSA you will need to create an FSA ID, which is used to confirm your identity when accessing financial aid information and electronically signing documents.

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• You can create an FSA ID on the Federal Student Aid website, studentaid.gov.

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• The questions on the FAFSA was reduced for the 2024-25 school year from 108 to just 36.

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FAFSA Deadlines

• You must fill out the FAFSA for each year you are in school.
• Complete the FAFSA as soon as possible because some aid programs have limited funds.
• The opening date to fill out the FAFSA is December 1 using your tax return for the prior year.
• The deadline is June 30^th of the school year you are applying for.
• Many schools have their own FAFSA deadlines so be sure to check with each college that you are interested in attending.

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• The FAFSA Submission Summary (FSS) replaces the Student Aid Report (SAR).

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• Once your FAFSA application is filled out and submitted, you will receive a FAFSA Submission Summary (FSS).

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• The FSS provides information about your eligibility for financial aid and is an opportunity to make any corrections to your FAFSA.

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• If you think there is an error on your FSS, you can either log on to the FAFSA website or use the Information Review Form on the back of the FSS to make the corrections.

FAFSA Submission Summary (FSS)

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• The SAI replaces the Expected Family Contribution (EFC).

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• The SAI is a number that is calculated based on the student's and parents’ (if applicable) income, asset, tax and demographic information on the FAFSA.

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• Your family size and the number of family members who will attend college during the year no longer play a factor in determining your SAI (as it did in the EFC).

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• Schools use the SAI to determine your federal student aid eligibility and financial aid award.

Student Aid Index (SAI)

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Cost of Attendance (COA) is an estimate of the amount it will cost you to attend a school.

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It includes:

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• Tuition and fees
• Food and housing
• Books, supplies, transportation, personal computer
• Dependent care, disability, study abroad, spending money

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Cost of Attendance (COA)

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How much aid will I qualify for?

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Your school determines how much federal aid you are eligible for by examining factors such as enrollment status, year in school, EFC, and COA. You may be eligible for both need-based and non-need-based aid.

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Calculating Your need-based Aid

Cost of Attendance (COA)

- Student Aid Index (SAI)

= Financial Need

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Schools calculate your need-based aid by subtracting the Student Aid Index (SAI) from the Cost of Attendance (COA).

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Need based financial aid

·  Federal Pell Grant

· New York State Tuition Assistance Program (TAP) Grant

·  Federal Supplemental Educational Opportunity Grant (FSEOG)

· Direct Subsidized Loan

·  Federal Work-Study

You can’t receive more need-based aid than the amount of your financial need.

*just because you are eligible for loans doesn’t mean you have to take them

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  Cost of Attendance (COA)

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– Financial Aid Awarded So Far

= Eligibility for Non-need-based Aid

Calculating Your Non-need-based Aid

Schools calculate your non-need-based aid by subtracting the aid awarded so far (including scholarships, grants, and the amount awarded by your school) from your COA.

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Non-need-based federal student aid

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·  Direct Unsubsidized Loan

·  Federal PLUS Loan

·  Teacher Education Access for College and Higher Education Grant

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The Best Order to Finance Your Education

You should always attempt to finance your education by searching for aid in this order:

• Grants
• Scholarships
• Work Study
• Federal Subsidized Loans
• Federal Unsubsidized Loans
• Private Loans

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Grants and Scholarships

• Grants and scholarships are sometimes called “free” student aid because, unlike loans, you don’t have to repay grants and scholarships.

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• Always start your search for financial aid by looking for “free” sources of funding.

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• Grants are available from both the U.S. Department of Education and New York State.

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• Some private colleges and universities may require, as part of their non-Federal financial aid application, that you complete the College Board’s “Profile” in order to qualify for scholarships. Check with the financial aid office at the schools you apply to for details.

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Federal Grants

The U.S. Department of Education administers several federal grant programs, including:

• Pell Grants, which are awarded to undergraduates with financial need. The amount you can receive depends on your need, cost of attendance, and enrollment status.
• Federal Supplemental Educational Opportunity Grants (FSEOG), which are awarded to students with exceptional financial need. Check with your financial aid office to see if your school participates in the FSEOG program.
• Teacher Education Assistance for College and Higher Education (TEACH) Grants, which may be available if you plan to pursue a teaching career.

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Additional New York State Grants

• The New York State Tuition Assistance Program (TAP) is administered by the New York Higher Education Services Corporation.
• TAP grants are available to New York residents attending New York schools who fall within certain income limits.
• You can find information about other “free” New York State aid programs at hesc.ny.gov.

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The Excelsior Scholarship

• The Excelsior Scholarship provides free tuition for eligible SUNY and CUNY students.

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• The program apply to families who earn $125,000 or less.

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• The application process starts around March 1^st.

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• The New York State Higher Education Services Corporation (HESC) will administer the Excelsior Scholarship. You can sign up for email alerts and learn more about the program on hesc.ny.gov.

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Scholarships

In the most recent data, more than $6.2 billion in private scholarships were awarded to more than 1.8 million undergraduate students with all manner of academic and athletic achievements.

You can find scholarships from a variety of sources, including:

• Online free scholarship finders
• Colleges and Universities
• Employers
• Community and Religious Organizations
• High School or Elementary School
• Organizations through which you pursue hobbies and academic interests
• Companies and Philanthropic Institutions
• Contests and Sweepstakes

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Work-Study

• Work-Study is a federal student aid program that provides part-time employment through the college or university to help pay your education expenses.
• Work-Study is available to undergraduate, graduate, and professional students with financial need for both part-time and full-time students.
• Check with your school's financial aid office to find out if your school participates in the Work-Study program.

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Federal Loans

If you still need to take out loans after exhausting all available grant, scholarship and work-study funding, consider all available federal loans before turning to private loans.

Federal loans offer several advantages compared to private loans, including:

• The interest rate on federal loans is typically lower than on private loans.
• No credit check or cosigner is required for most federal loans.
• You don’t have to start repayment until you graduate, leave school, or change your enrollment status to less than half-time.
• There are flexible repayment plans and more options to postpone repayment.
• You may be eligible for loan forgiveness if you meet certain criteria.

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Types of Federal Loans

• Some federal loans are subsidized, which means that interest is paid by the Federal government while you are in school and in approved grace periods or deferments.

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• Other federal loans are unsubsidized, which means that interest will accrue from the first day the loan is disbursed. You may be able to delay repaying interest while you are in school, but the accrued interest will be capitalized and added to the principal balance of your loan.

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• Once you determine that you will need to borrow, first take out all available Subsidized Loans to cover your education expenses.

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• If you can afford it, you should consider making interest payments on Unsubsidized Loans while you are in school to avoid having the unpaid interest capitalized.

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Federal Direct Subsidized Loans

• Direct Subsidized Loans are available to undergraduate students with financial need.
• The interest rate for loans for the 2024-25 academic year is 6.53%
• The amount you can borrow is determined by your school and cannot exceed your financial need.
• You are not charged interest while you are in school at least half-time, for the first 6 months after leaving school, and during deferment.

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Federal Direct Unsubsidized Loans

• Direct Unsubsidized Loans are available to undergraduate and graduate students; financial need is not required.
• The interest rate for undergraduate loans for the 2024-25 academic year is 6.53%; for graduate loans the rate is 8.08%.
• You will be charged for interest as soon as your loan is disbursed. You can choose not to pay interest while you are in school or during grace periods, deferment, or forbearance, but interest will accrue and be added to the principal balance of your loan.

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Federal PLUS Loans

• PLUS loans are available for graduate or professional degree students and parents of dependent undergraduate students.
• Credit history is considered and poor credit history can disqualify potential borrowers.
• The interest rate for loans disbursed for the 2024-25 academic year is 9.08%.
• PLUS loans enter repayment as soon as they are disbursed. You can delay repayment while in school but interest will accrue and be added to the principal balance of your loan.

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Private Loans

• Private student loans are originated by banks, credit unions, peer-to-peer lenders, and private colleges and universities themselves.

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• Private Loans should be considered only after you have used all available “free” aid and federal student loans.

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Private Loans

Some of the drawbacks of private loans include:

• Interest rates are often higher than on federal loans and can be variable.
• Payments may start while you are still in school.
• Interest typically accrues while you are in school.
• Interest rates are based on a borrower’s creditworthiness.
• Private loans may require a co-signer.
• Interest may not be tax deductible.
• Private loans do not offer the same advantageous repayment programs as federal loans, such as income driven repayment.
• Private loans do not qualify for federal loan forgiveness programs.
• Private loans may not offer deferments or forbearances.

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Financial Aid Award Information Sheet

The New York State Financial Aid Award Information Sheet is a simple one page summary, provided by the school’s financial aid office, that breaks down a students final cost of attendance. It is given to all undergraduate students who attend New York schools.

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It also provides data on a school’s:

• Financial aid options
• Estimate of the cost for each academic year to earn a degree at the institution
• Graduation rate
• Median borrowing rate
• Loan default rate

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It is a convenient and easy way to compare different colleges

performance and the actual cost of attending each college

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http://www.dfs.ny.gov/consumer/shopping_sheet/shopping_sheet_default.pdf

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Get on Your Feet Student Loan Forgiveness Program

• The New York State Get on Your Feet Loan Forgiveness Program is designed to help recent New York State college graduates focus on establishing their careers and starting life out on a sound financial footing.
• Recent graduates are eligible to receive an award equal to 100 percent of his or her monthly federal income-driven repayment plan payments for 24 months of repayment.
• To qualify you must graduate from a New York college, continue to live in New York, and meet certain income criteria.
• The program is being administered by the New York State Higher Education Services Corporation. To learn more or apply, visit hesc.ny.gov/GetOnYourFeet.

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For more information

www.dfs.ny.gov

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Questions can be emailed to students@dfs.ny.gov