1	Financial Planning Workshop Hit the Bull's-Eye and Begin Planning for College!
2	Agenda College costs Tomorrow’s resources Today’s preparation Other strategies
3	Cost of college is going up!!!!! When your student was in kindergarten: National Average Tuition, Room and Board Costs 1994-95: Four-year private $16,602 Four-year public $ 6,670 Two-year public $ 4,137
4	Cost of college is going up!!! Yes, this is a 46% increase in 13 years! National Average Tuition Cost 2006-07: Four-year private $22,218 Four-year public $ 5,836 Two-year public $ 2,272 Declining Federal and State Support
5	Tomorrow’s resources Need-based aid Merit-based aid Federal tax benefits
6	Myth 1 Your role as a parent DOES NOT end once your child turns 18!
7	Myth 2 When in doubt, refer to Myth 1!
8	Definition of Federal Financial Aid Students and parents are the primary source of funds for postsecondary education and are expected to contribute to the extent they are able. Educational costs are the family’s responsibility, Need-based aid is based on family’s financial situation, Need-based aid attempts to cover what family cannot.
9	6^th Graders If your child will graduate in 2013, you will be completing the FAFSA for 2013-2014 school year. Criteria 1-Was the student born before 1/1/1990?
10	7^th Graders If your child will graduate in 2012, you will be completing the FAFSA for 2012-2013 school year. Criteria 1-Was the student born before 1/1/1989?
11	8^th Graders If your child will graduate in 2011, you will be completing the FAFSA for 2011-2012 school year. Criteria 1-Was the student born before 1/1/1988?
12	Federal Definition of a Dependent Student for Financial Aid Purposes If you (the student) can answer ‘Yes’ to any one of these questions on the FAFSA, you are considered an independent student and do not have to provide your parent(s) information on the FAFSA: Were you born BEFORE (date in corresponding slides)?; At the beginning of the school year, will you be working on a master’s or doctorate program?; As of today, are you married?; Do you have children who receive more than half their support from you (the student)?;
13	Federal Definition of a Dependent Student for Financial Aid Purposes 5. Do you have dependents (other than a child or spouse) who live with you and who receive more than half their support from you (the student)?; 6. Are (a) both of your parents deceased, or (b) are you (or were you until age 18) a ward/dependent of the court?; 7. Are you a veteran of the U.S. Armed Forces?; 8. Are you currently serving on active duty in the Armed Forces for purposes other than training?
14	Federal Formula Expected Family Contribution (EFC) Income and assets Family size Number in college State taxes Age of older parent
15	How is Financial Need Determined? Financial need is determined from the information you provide to the Department of Education on your FAFSA. The results of your information are put into a federal formula which determines your Expected Family Contribution (EFC). This information is sent electronically to the school you indicate on your FAFSA. The school then determines your cost of attendance for the fall and spring semesters. Your Cost of Attendance minus your Expected Family Contribution (COA-EFC) equals your financial need.
16	How is Financial Need Determined? Cost of Attendance - Expected Family Contribution = Financial Need **Free EFC calculator at www.finaid.org
17	What is need-based aid Grants Work-study Loans From: Federal programs State programs Institutional programs
18	Merit-based aid Scholarships PSAT (National Merit) HS GPA Class rank SAT/ACT Talent/Athletics Employer Church Civic organization Volunteerism, etc.
19	Florida Bright Futures Three lottery-funded programs Each award has its own: Academic eligibility requirements, Award amounts, and Funding length Subject to legislative change www.FloridaStudentFinancialAid.org
20	Florida Bright Futures Program http://www.firn.edu/doe/brfutures/home0072.htm Florida Academic Scholars-100% tuition plus $600 per year educational allowance Florida Medallion Scholarship-75% tuition -100% tuition at community colleges Florida Vocational Gold Seal-75% tuition -100% tuition at community colleges
21	Federal tax benefits Tax credits Hope Lifetime Learning Tax deductions Student Loan Interest
22	Tax credits You may qualify if: You pay qualified education expenses of higher education Qualified education expenses: T&F, sometimes books, supplies and equipment You pay education expenses for eligible student Eligible student: you, your spouse, or dependent for whom you claim an exemption on your tax return Income cap: $51,000 or more ($103,000 or more for joint return)
23	Comparison of credits
24	Student Loan Interest Deduction Reduces amount of income subject to tax by up to $2,500 Income cap: $65,000 or more (130,000 or more for joint filers)
25	Tuition and Fees Deduction Currently extended through 2007 tax year. May deduct up to $4,000 in tuition expenses as an income exclusion. May only claim deduction for tuition expenses paid by the tax filer. Can claim only if you filed a 1040.
26	Today’s preparation Education savings vehicles Non-education savings vehicles
27	Education savings vehicles 529 pre-paid tuition plans 529 savings plans Coverdell education savings accounts
28	529 pre-paid tuition plans Prepay future T&F Lock in T&F at today’s rates Typically at public institutions located in state sponsoring plan Most have state guarantee Florida Prepaid College Plan
29	Florida Pre-Paid Program http://www.florida529plans.com Tuition & fee cost at USF for 2006-2007 is $111.41 credit/hr. FL Pre-Paid tuition pays for $82.15 credit/hr. If your student also has the local fee plan, it will pay for $107.66 per credit hour. Remaining $3.75 per credit hour in fees not covered by Pre-Paid Tuition or Local Fee Plan at USF.
30	Florida Pre-Paid Program http://www.florida529plans.com The Florida Prepaid College Plan tuition contract covers the tuition, or "registration fees", at universities and community colleges which consist of the following four fee categories: Matriculation Fee ($73.71 at USF) Building Fee ($ 2.32 at USF) Capital Improvement Fee ($ 2.44 at USF) Financial Aid Fee +($ 3.68 at USF) $82.15 Tuition per credit hour
31	Florida Pre-Paid Program http://www.florida529plans.com Local fee contracts cover fees that are imposed on individual state university and community college campuses by state law. These fees are charged in addition to the tuition charged by the state university or community college. Activity and Service Fee ($8.08 at USF) Health Fee ($7.27 at USF) Athletic Fee +($10.16 at USF) $25.51 Student Activity Fee & Technology Fee (charged by community colleges only)
32	Florida Pre-Paid Housing Housing Plan available to pay for on-campus housing costs.
33	529 Savings Plans Investment account to pay beneficiary’s qualified higher education expenses Value based on performance of investment Carry investment risk Account value may increase or decrease depending on market conditions Florida College Investment Plan
34	529 Tax Considerations Contributions - after tax Earnings – tax free at federal level Withdrawals - tax free through 2010 for qualified higher education expenses Many experts believe withdrawal benefit will be renewed, but there are no guarantees
35	Coverdell Education Savings Accounts May be used for any education costs Distributions – tax free for qualified education expenses Greater investment flexibility (relative to 529s) Contributions limited to $2,000 Decrease as income increases Income cap: $110,000 or more ($220,000 for more for joint filers)
36	Non-education savings vehicles Custodial accounts Savings account Stocks/bonds
37	Custodial accounts Uniform Gifts to Minors Act (UGMA) Uniform Transfer to Minors Act (UTMA) Property held in custodial account is owned by child Account terminates when child reaches specified age (often 18 or 21) Income of account is taxed to child
38	Other strategies Financial literacy skills Career planning Other cost reducing ideas
39	Financial Literacy There is more to paying for college than saving money or receiving financial aid. Teaching children to handle money responsibly can go a long way towards stretching what you have.
40	Career planning Explore child’s career interests Changing majors is costly Consider earning potential versus cost of program or college Will the occupation provide expected standard of living? www.AdventuresInEducation.org
41	Other cost reducing ideas Gain college credit while in HS Reducing length of college career reduces costs Dual enrollment courses Summer college classes Advanced Placement courses & exams CLEP tests
42	Other cost reducing ideas Attend community college 1^st two years Military Service Academy ROTC National Guard GI Bill Other considerations
43	More information? Florida Information www.FloridaStudentFinancialAid.org www.Florida529plans.com www.usf.edu/finaid General Information www.AdventuresInEducation.org www.finaid.org www.studentaid.org www.collegeboard.com
44	"Thank you" Thank you!