Post-Secondary Plans Study Guide PDF

Unit 1: Post-Secondary Plans - Vocabulary Study Guide Directions: Below are all of the terms you should define as we move through the unit. They will be tested on a vocabulary check at a later date. Associate’s Degree...

Unit 1: Post-Secondary Plans - Vocabulary Study Guide Directions: Below are all of the terms you should define as we move through the unit. They will be tested on a vocabulary check at a later date. Associate’s Degree Forbearance Loan Servicer Cosigner FAFSA Opportunity Cost​ Sticker Price Default Gap Year Net Price Student Aid-Report/FAFSA Deferment Gift Aid Principal Submission Summary​ Direct Plus Loans Grace Period Private Student Loan Trade School Direct Subsidized Loan Grants Repayment Period Tuition Student Aid Index Interest Rates Repayment Plan Variable-Rate Loan Federal Student Aid Internship Return of Investment (ROI) Vocational Training Financial Aid Offer Loan Refinancing Room and Board Work-Study Fixed-Rate Loan Loan Consolidation Scholarship Unit 1: Attending and Paying for College- Content Study Guide Directions: Below are some of the concepts you should be familiar with as we move through the unit. They will be tested on a content test at a later date. Concept Notes Understand the factors used to determine if college is worth the 1.​ Expected Earnings Increase – Consider how much more you’ll earn with a degree compared to without one. Some careers require a degree and pay significantly more (e.g., medicine, engineering), while others may not justify the cost. high opportunity cost of 2.​ Cost of Attendance – Tuition, fees, housing, and other expenses can add up. Compare these costs with potential attendance financial aid, scholarships, and grants. 3.​ Opportunity Cost – The money you could be earning by working instead of attending college should be factored in. If you skip college, could you enter a well-paying trade or start a business? 4.​ Field of Study – Some degrees have a much higher return on investment (ROI) than others. STEM, business, and healthcare fields often pay off more than certain humanities or arts degrees. 5.​ Job Market Demand – Research job availability and security for your chosen field. Some degrees lead to stable, high-demand careers, while others have limited opportunities. 6.​ Networking & Connections – College provides opportunities to meet professors, mentors, and peers who can help with career advancement. 7.​ Skill Acquisition – College isn't just about the degree; it's also about the skills you develop. Some skills can be self-taught or gained through apprenticeships, boot camps, or trade schools. 8.​ Personal & Professional Growth – College can provide valuable experiences that shape you as a person, expand your knowledge, and improve your problem-solving and critical-thinking skills. 9.​ Alternative Paths – Compare college to other career paths like trade schools, certifications, or entrepreneurship, which may provide a better return on investment for certain careers. Compare and contrast the benefits of different life paths after 1. Four-Year University high school (four year university, community college, entering the Benefits: workforce, etc.). ​ Higher earning potential, especially in fields like medicine, business, engineering, and law  ​ Access to internships, networking, and professional connections ​ Broader education with opportunities for specialization ​ Social and personal growth, including extracurricular activities and campus life Drawbacks: ​ High tuition costs and potential student loan debt ​ Time-consuming (typically four years) ​ Not all degrees guarantee high-paying jobs 2. Community College Benefits: ​ More affordable than a four-year university ​ Can transfer to a four-year school later (lowering overall costs) ​ Flexible schedules, often allowing students to work while studying ​ Good for associate degrees or vocational training leading to solid job prospects Drawbacks: ​ Limited social and networking opportunities compared to universities ​ Some careers still require a bachelor's degree ​ The transfer process can be complicated if not planned well 3. Trade School (Vocational or Technical College) Benefits: ​ Shorter programs (6 months to 2 years) leading to high-paying jobs (electrician, plumber, mechanic, welder, etc.) ​ Hands-on learning with direct job training ​ High demand in skilled trades ​ Typically lower tuition costs Drawbacks: ​ Limited career flexibility (specialized training for specific jobs) ​ Some trades can be physically demanding ​ Less traditional "college experience" 4. Entering the Workforce Immediately Benefits: ​ Start earning money right away ​ Avoids student loan debt ​ Gains work experience and builds skills early ​ May lead to promotions or job-based learning (some companies pay for further education) Drawbacks: ​ Lower starting wages compared to college graduates in many fields ​ Fewer long-term career advancement opportunities without further education ​ Certain high-paying fields may be inaccessible 5. Entrepreneurship Benefits: ​ Full control over career and income potential ​ No formal education required (self-learning, mentorships, and experience are key) ​ Can be very rewarding financially and personally if successful Drawbacks: ​ High risk of failure, especially early on  ​ No guaranteed income or benefits like health insurance ​ Requires strong discipline, networking, and financial management skills Conclusion: ​ A four-year university is best for careers requiring a degree and for those who value the college experience. ​ Community college is great for cost-conscious students or those unsure about committing to a four-year program. ​ Trade school is ideal for those who want quick, hands-on job training for high-demand skilled work. ​ Joining the workforce works well for those who prefer hands-on experience and financial independence right away. ​ Entrepreneurship is a good fit for self-motivated individuals with a strong business mindset and risk tolerance. Compare and contrast the net and sticker price of various 1. Sticker Price (Published Cost) colleges and universities ​ This is the total cost before any financial aid. ​ Includes tuition, fees, room and board, and other expenses. ​ Private universities typically have higher sticker prices than public universities. 2. Net Price (Actual Cost After Aid) ​ This is what students actually pay after financial aid, grants, and scholarships. ​ Many students do not pay the full sticker price. ​ Need-based and merit-based aid can significantly lower costs. Cost Comparison by College Type College Type Average Sticker Price Average Net Price (Per Notes (Per Year) Year) Public In-State University $20,000 - $30,000 $10,000 - $15,000 Lower cost for in-state residents, v 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 ai net price. Community Colleges $5,000 - $12,000 $3,000 - $8,000 Significantly lower costs, especiall students. Ivy League & Elite Private $70,000 - $90,000 $10,000 - $30,000 Generous financial aid makes net p Schools expected for many. Key Takeaways: ​ Public in-state universities are the most affordable option before aid. ​ Out-of-state tuition can be significantly higher, but some states offer tuition reciprocity programs. ​ Private universities have high sticker prices but often offer generous financial aid, sometimes making them cheaper than public schools. ​ Community colleges offer the lowest cost and a pathway to transfer to a four-year school. ​ Elite schools like Ivy League universities often have low net prices for middle- and low-income families due to strong financial aid programs. Differentiate between direct and indirect college costs 1. Direct Costs (Mandatory & Paid to the School)  These are expenses that you pay directly to the college or university. ✅ Examples: ​ Tuition & Fees – The cost of classes, lab fees, and other academic charges. ​ Room & Board – The cost of living on campus, including dorms and meal plans. 💰 Why It Matters: ​ These costs are billed by the school and must be paid upfront or through financial aid. ​ They are usually the biggest part of a college’s sticker price. 2. Indirect Costs (Personal Expenses) These are costs related to attending college but not paid directly to the school. ✅ Examples: ​ Books & Supplies – Textbooks, notebooks, software, lab materials. ​ Transportation – Gas, flights, public transportation, parking fees. ​ Personal Expenses – Clothes, toiletries, entertainment, eating out. ​ Off-Campus Housing & Food – Rent, groceries, utilities if not living in a dorm. 💰 Why It Matters: ​ Indirect costs vary by student lifestyle and location. ​ They are often overlooked but can add up quickly. ​ Planning for these expenses helps avoid financial stress. Key Differences: Factor Direct Costs Indirect Costs Paid to College? ✅ Yes ❌ No Fixed Cost? ✅ Usually ❌ Varies Can Be Covered by Financial Aid? ✅ Yes ✅ Sometimes (depends on aid package) Personal Control? ❌ No ✅ Yes (depends on choices) Conclusion: ​ Direct costs are set by the school and non-negotiable. ​ Indirect costs depend on personal choices and location. ​ Planning for both ensures a more accurate college budget. Identify strategies that can be employed to minimize the cost of Minimizing the cost of post-secondary education requires a combination of smart financial planning and strategic decision-making. Here are some key strategies: post-secondary education (e.g. filling out FAFSA) 1. Apply for Financial Aid (FAFSA & CSS Profile) ✅ Why? – The Free Application for Federal Student Aid (FAFSA) determines eligibility for grants, work-study, and federal ✅ Tip: – Apply as early as possible to maximize aid. loans. Some schools also require the CSS Profile for additional aid.​ 2. Apply for Scholarships ✅ ✅ Why? – Scholarships are free money that doesn’t have to be repaid.​ Where to Find Them? ​ College websites ​ Local organizations and community groups ​ National databases (Fastweb, Scholarships.com, Bold.org) ​ Employer-sponsored scholarships 3. Choose an Affordable School ✅ ✅ Why? – Your choice of school can dramatically impact costs.​ Options: ​ Attend an in-state public university – Lower tuition for residents. ​ Start at a community college – Then transfer to a four-year school. ​ Consider schools with generous aid – Some private colleges offer strong financial aid, making them cheaper than public universities. 4. Utilize Work-Study and Part-Time Jobs ✅ ✅ Why? – Federal work-study provides part-time jobs that help cover expenses.​ Other Options: – On-campus jobs, tutoring, or paid internships. 5. Minimize Living Costs ✅ ✅ Why? Tips: – Housing and food can be major expenses.​ ​ Live at home if possible. ​ Get roommates to split rent. ​ Cook at home instead of eating out. 6. Test Out of Courses (AP, IB, CLEP, Dual Enrollment) ✅ Why? – Earning college credit in high school can reduce the number of courses you need to take (and pay for). 7. Take Advantage of Tax Benefits ✅ Why? – Tax credits like the American Opportunity Tax Credit (AOTC) and Lifetime Learning Credit (LLC) can reduce your tax burden. 8. Be Smart About Student Loans ✅ ✅ Why? Tips: – Borrowing too much can lead to long-term debt.​ ​ Only take out what you need, not the maximum amount offered. ​ Prioritize subsidized federal loans over private loans. ​ Compare interest rates before borrowing. 9. Look for Tuition Reimbursement Programs ✅ Why? – Some employers offer tuition assistance for employees. 10. Consider Military or Public Service Programs ✅ Why? – Programs like the GI Bill, ROTC scholarships, and AmeriCorps can help cover costs in exchange for service commitments.  💰) Differentiate between the various types of financial aid (grants, 1. Grants (Free Money work-study, subsidized/unsubsidized federal ✅ ✅ What is it? – Money awarded that does not have to be repaid (unless you withdraw from school or don’t meet eligibility).​ Types: student loans, and private student loans ​ Federal Grants (Need-based) ○​ Pell Grant – For low-income students, based on FAFSA. ○​ FSEOG (Federal Supplemental Educational Opportunity Grant) – Extra aid for students with high financial need. ​ State Grants – Vary by state, often for in-state residents. ​ Institutional Grants – Awarded by colleges based on financial need or merit. ❌ Downside: Limited availability; may not cover all costs. 2. Work-Study (Earn-as-You-Go 💼) ✅ ✅ What is it? – A federal program where students work part-time (on or off campus) to earn money for educational expenses.​ Key Points: ​ Based on financial need (determined by FAFSA). ​ Jobs are usually flexible and school-friendly. ​ Earnings do not directly reduce tuition; students get paid like a regular job. ❌ Downside: Limited hours, and not every student gets a position. 3. Federal Student Loans (Government Borrowing 💳) ✅ What is it? – Money borrowed from the government that must be repaid after graduation (or dropping below half-time ✅ Types: enrollment).​ ​ Subsidized Loans (Best option for students) ○​ Need-based (determined by FAFSA). ○​ The government pays the interest while you’re in school. ○​ Lower borrowing limits than unsubsidized loans. ​ Unsubsidized Loans ○​ Not need-based (available to all students). ○​ Interest starts accruing immediately while in school. ○​ Higher borrowing limits than subsidized loans. ❌ Downside: Must be repaid with interest, but federal loans usually have lower rates and better repayment options than private loans. 4. Private Student Loans (Last Resort 🏦) ✅ ✅ What is it? – Loans from banks, credit unions, or private lenders to cover education costs.​ Key Points: ​ Credit-based – May require a co-signer (like a parent) for approval. ​ Interest rates vary (often higher than federal loans). ​ Less flexible repayment options. ❌ Downside: Higher risk of long-term debt, no government protections, and interest accrues immediately. Quick Comparison Chart  Type of Aid Repayment Based on Financial Interest Accrues? Source Required? Need? Grants ❌ No ✅ Yes ❌ No Government/Colleges Work-Study ❌ No (You Earn It) ✅ Yes ❌ No Government/Colleges Subsidized Loans ✅ Yes ✅ Yes ❌ No (while in school) Government Unsubsidized Loans ✅ Yes ❌ No ✅ Yes (immediately) Government Private Loans ✅ Yes ❌ No ✅ Yes (immediately) Banks/Lenders Best to Worst Financial Aid Options (Ranked) 1️⃣ Grants – Free money = best option!​ 2️⃣ Work-Study – Earn while in school, no debt.​ 3️⃣ Subsidized Loans – Low-cost borrowing with no interest in school.​ 4️⃣ Unsubsidized Loans – Interest accrues, but still lower-risk than private loans.​ 5️⃣ Private Loans – Should only be used as a last resort after exhausting all other options. Compare and contrast the different types of student loan 1. Standard Repayment Plan (Default Plan) repayment plans ✅ How it works: ​ Fixed payments over 10 years. ​ Minimum monthly payment: $50 or more. 💰 Best For: ​ Borrowers who can afford the standard payment. ​ Those who want to pay off loans quickly and save on interest. ❌ Downside: Higher monthly payments compared to income-driven plans. 2. Graduated Repayment Plan ✅ How it works: ​ Payments start low and increase every two years over 10 years. ​ Designed for borrowers whose income will grow over time. 💰 Best For: ​ New graduates who expect to earn more in the future. ​ Those who want to pay off loans in 10 years but need lower payments at first. ❌ Downside: More interest paid compared to the standard plan because of smaller initial payments. 3. Extended Repayment Plan ✅ How it works: ​ Repayment period: Up to 25 years. ​ Payments can be fixed (same every month) or graduated (increase over time). 💰 Best For: ​ Borrowers with high loan balances who need lower monthly payments. ❌ Downside: ​ More interest paid over time. ​ Not available for all loans (must have more than $30,000 in Direct Loans). 4. Income-Driven Repayment (IDR) Plans ✅ How they work: ​ Monthly payments are based on income and family size. ​ Remaining balance is forgiven after 20-25 years (depending on the plan). 💰 Best For: ​ Those with low income or high student debt. ​ Borrowers seeking loan forgiveness after working in public service (PSLF program). ❌ Downside: ​ Paying over a longer period = more interest accrued. ​ If loans are forgiven, the forgiven amount may be taxed (except for PSLF). Comparison Table: Federal Loan Repayment Plans Plan Repayment Length Monthly Payment Forgiveness? Bes Standard 10 years Fixed amount ❌ No Borrowers who ca payments Graduated 10 years Starts low, increases every 2 years ❌ No Graduates expecti Extended Up to 25 years Fixed or graduated payments ❌ No Borrowers with la Private Student Loan Repayment Plans Unlike federal loans, private loans do not have standardized repayment plans. However, lenders may offer: ​ Fixed or variable interest rate options. ​ Shorter or longer repayment terms (5-20 years). ​ Limited income-based options (not as flexible as federal IDR plans). ​ Forbearance or deferment (but with stricter rules). 💰 Best For: ​ Borrowers with strong credit and income who want to refinance at a lower interest rate. ❌ Downside: ​ No federal protections or forgiveness options. Choosing the Best Plan for You ​ If you want to pay the least overall, go with Standard Repayment. ​ If you need lower payments at first, Graduated Repayment might work. ​ If you need lower monthly payments, consider SAVE or another IDR plan. ​ If you plan to work in public service, go for PSLF + an IDR plan. ​ If you have private loans, look into refinancing for a lower rate.