Student Loan Repayment Plan Options

• Post-secondary planning involves understanding various terms related to college and financial aid, which will be assessed in a vocabulary check

Factors Determining if College Is Worth the Cost

• Expected earnings increase with a degree should be weighed against the cost.
• Cost of attendance includes tuition, fees, housing, and other expenses.
• Opportunity cost refers to potential earnings from working instead of attending college.
• The field of study affects ROI; STEM, business, and healthcare often yield higher returns.
• Job market demand should be researched to ensure career stability and opportunities.
• College provides networking opportunities through professors, mentors, and peers.
• Skill acquisition is important, but skills can also be gained through apprenticeships or trade schools.
• College can offer personal and professional growth through experiences and improved critical thinking.
• Alternative paths like trade schools or entrepreneurship may offer better returns on investment.

Comparison of Life Paths After High School

Four-Year University

• Benefits include higher earning potential in certain fields, access to internships and networking, broader education with specialization options, and social and personal growth through campus life.
• Drawbacks are high tuition costs, potential student loan debt, time commitment, and no guarantee of high-paying jobs.

Community College

• Benefits include affordability, potential to transfer to a four-year school, flexible schedules, and vocational training.
• Drawbacks include limited social and networking opportunities and the need for further education for some careers.

Trade School (Vocational or Technical College)

• Benefits are shorter programs leading to high-paying jobs, hands-on learning, high demand in skilled trades, and lower costs.
• Drawbacks include limited career flexibility, physically demanding work, and less traditional college experience.

Entering the Workforce Immediately

• Benefits include immediate income, avoided student loan debt, work experience, and potential promotions or job-based learning.
• Drawbacks are lower starting wages, fewer advancement opportunities, and inaccessibility to certain high-paying fields.

Entrepreneurship

• Benefits include control over career and income, no formal education requirements, and potential for financial and personal rewards.
• Drawbacks are high risk of failure, no guaranteed income or benefits, and the need for strong discipline and financial management skills.

Conclusion on Post-Secondary Paths

• Four-year universities are best for careers needing degrees and for those who value the college experience.
• Community colleges are great for saving money or if unsure about a four-year program.
• Trade schools are good for quick, hands-on jobs.
• Working right away suits those wanting hands-on experience and financial independence.
• Entrepreneurship is for business-minded people who can handle risk.

Net vs. Sticker Price

Sticker Price

• The total cost before financial aid including tuition, fees, room, board, and expenses.
• Private universities have higher sticker prices than public ones.

Net Price

• What students pay after financial aid, grants, and scholarships.
• Need-based and merit-based aid can lower costs significantly.

Cost Comparison by College Type

• See the following

College Type | Average Sticker Price (Per Year) | Average Net Price (Per Year) | Notes

• --------|----------|----------|---------- Public In-State University | $20,000-$30,000 | $10,000-$15,000 | Lower cost for in-state residents Public Out-of-State University | $30,000-$50,000 | $20,000-$35,000 | Higher costs for non-residents Private Universities | $50,000-$80,000 | $20,000-$40,000 | Large scholarships and financial aid reduce net price. Community Colleges | $5,000-$12,000 | $3,000-$8,000 | Significantly lower costs, for commuter students. Ivy League & Elite Private Schools | $70,000-$90,000 | $10,000-$30,000 | Generous financial aid makes net price competitive.

• Public in-state universities are the most affordable before aid.

• Out-of-state tuition can be higher, but some states have reciprocity agreements.

• Private universities often offer generous financial aid, potentially cheaper than public schools.

• Community colleges are the cheapest and allow transfer to a four-year school.

• Elite schools often have low net prices for lower-income families through strong financial aid.

Direct Costs (Mandatory & Paid to the School)

• Expenses paid directly to the college or university.
• Examples: Tuition & Fees, and Room & Board (dorm and meal plan costs)
• These costs are billed by the school and paid upfront or through aid and usually are the largest part of the sticker price.

Indirect Costs (Personal Expenses)

• Costs related to attending but not payable to the school.
• Examples: Textbooks, travel, personal items, off-campus housing/food etc
• These vary by lifestyle and location and planning is important

Key Differences Between Direct and Indirect Costs

Direct Costs Paid to College? | Yes Fixed Cost? | Usually Can Be Covered by Financial Aid? | Yes

Indirect Costs Paid to College? | No Fixed Cost? | Varies Can Be Covered by Financial Aid? | Sometimes (depends on aid package) Personal Control | Yes (depends on choices)

• Direct costs are set by the school and indirect costs depend on personal ones.

Strategies to Minimize the Cost of Post-Secondary Education

• Requires a mix of smart financial planning and strategic decision-making.

Apply for Financial Aid (FAFSA & CSS Profile)

• The FAFSA gives eligibility for supports; apply early to get these benefits.

Apply for Scholarships

• Scholarships do not need to be repaid; look at websites, communities etc to find them

Choose an Affordable School

• The school you pick will impact your costs a lot; look at schools in-state, community colleges etc

Utilize Work-Study and Part-Time Jobs

• Work-study jobs help cover your costs

Minimize Living Costs

• Housing and food are major expenses, try to live at home, get roommates, shop for groceries etc

Test Out of Courses

• Earning college credit in high school cuts down how many courses to take and pay for

Take Advantage of Tax Benefits

• Tax credits cut down your tax burden

Be Smart About Student Loans

• Do not borrow too much as it can lead to long-term debt

Look for Tuition Reimbursement Programs

• Some employers may help with tuition

Consider Military or Public Service Programs

• These programs can help to cover costs

Grant Types

• Money not repaid unless you pull out or do not meet what you have to
• Includes federal, state and institutional grants

Work-Study

• Federal program where students work to earn money
• Does not directly cut tuition; limited position

Federal Student Loans

• Money borrowed from the government is repaid after graduating
• Available as subsidized and unsubsidized loans

Federal Subsidized and Unsubsidized Loans

• Subsidized: Government pays the interest while you're in school but has a need requirement
• Unsubsidized: Interest starts accruing fast and is not need based
• They must be repaid with interest

Private Student Loans

• Taken from private lenders to cover tuition
• Rates vary and may need a co-signer and less flexible
• Higher risk

Federal and Private Loans Quick Comparison

• Grants > Work-Study > Subsidized > Unsubsidized > Private

Standard Repayment Plan

• Payments are a fixed rate and often 10 years
• For people who can afford the payment and want to pay off quickly

Graduated Repayment Plan

• Payments are low and increase over time
• For graduates who feel they will earn more over time

Extended Repayment Plan

• Repayment period is longer (Up to 25 years)
• For high loan balances and need lower payments

Income-Driven Repayment (IDR) Plans

• Payments depend on monthly income and family size
• Balance may be forgiven after 2 decades
• Types: SAVE, PAYE, REPAYE, IBR and ICR depending on your relationship with debt and career
• Also good if you seek being in public service

Public Service Loan Forgiveness (PSLF) Plan

• Public service (government, nonprofit, teaching, healthcare, etc.) needed
• Make qualifying montly payments under an IDR
• Loan balance is free after that

Federal Loan Repayment Plans Quick Comparison

• Each plan has specific circumstances needed to be Best For.

Private Student Loan Repayment Plans

• Private plans do not have standardized repayment plans for everyone
• But lenders will often offer the following
• Fixed or variable interest rates
• Shorter and longer repayments
• Forbearance and deferment options

Choosing the Best Plan for You

• If your goal is to pay the least, pick a standard repayment option.
• If you need lower payments at first, pick graduated repayment.
• If you want low monthly payments, pick IDR.
• If you plan on going into public service, focus on PSLF.
• If you have private loans, seek refinancing for a lower rate.

Explore student loan repayment strategies, including options for income-driven and extended plans, to help borrowers find suitable solutions based on their financial goals and capabilities. Understand the nuances of each plan to optimize repayment.