By: Scott Kessler
LPL Financial
SmartCollegeFunding.com
LPL Financial Member FINRA/SIPC
We know why college matters
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Bachelor’s degree holders earn $1 million more over a lifetime than
high school graduates
By 2020, 75% of all U.S. jobs will require a degree beyond high
school
Unemployment rates by educational level as of 5/2013
11.1% Less than high school diploma
7.4% High school, no college
6.5% Some college
3.8% College or greater
LPL Financial Member FINRA/SIPC
Graduation Rates
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4 Year Graduation Rates
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Public Colleges 31%
Private Colleges 53%
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6 Year Graduation Rates
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Public Colleges 58%
Private Colleges 65%
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6 Year Graduation Rate - 2013
www.collegeresults.org
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Univ. of Florida
Univ. of Georgia
Univ. of So. Carolina
Univ. of Tennessee
University of Arkansas
GCSU
University of North GA
Georgia Southern
86.5%
82.2%
72.7%
67.5%
60.1%
61.2%
52.8%
50.5%
LPL Financial Member FINRA/SIPC
Average Cost of College (COA)
per College Board 2014-2015
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Public University $23,410 per year
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Private University $44,272 per year
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Elite Private University $55,000+ per year
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Paying for College
There are two very different prices for college:
one for the informed buyer &
one for the uninformed buyer
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Retail vs. Wholesale
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When you fly do you pay the same as the person
sitting next to you?
Which seat would you rather sit in?
I paid
$369
Only
$119!
LPL Financial Member FINRA/SIPC
Cost of Attendance (COA)
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Includes direct costs to the college (tuition/fees)
Also includes indirect costs for related educational
expenses
 Room/Board
 Books/Supplies
 Transportation
 Miscellaneous
Living Expenses
LPL Financial Member FINRA/SIPC
Expected Family Contribution (EFC)
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A measure of how much the student and his or her family can be
expected to contribute to the cost of the student’s education for
the year
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EFC is calculated by a formula specified in federal law
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Factors include but are not limited to:
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Assets
Adjusted gross income
Federal tax liability
Number in household
Number in college
Student’s dependency status
LPL Financial Member FINRA/SIPC
Financial Aid Formula
COA (Cost of Attendance)
- EFC (Expected Family Contribution)
= FN (Financial Need)
The difference between the COA and EFC numbers is
your “financial need” or eligibility for financial aid at
a particular school.
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Free Money
Scholarships
&
Grants
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Loans
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Must be paid back
Direct Loans (Stafford) - students
PLUS - parents
LPL Financial Member FINRA/SIPC
Financial Aid Basics – Federal Programs
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Free Application for Federal Student Aid (FAFSA)

www.fafsa.gov
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The gateway for all Federal Student Aid programs
 Includes
student and parent loan programs
LPL Financial Member FINRA/SIPC
Financial Aid Basics – Loan Programs
Direct Subsidized Loans
 Gov’t pays interest while
student is enrolled in school
at least half-time
 Need-based
 1.073% origination fee
withheld by US Dept. of
Education prior to
disbursement
 2015-2016 Interest Rate is
4.29% (fixed)
LPL Financial Member FINRA/SIPC
Unsubsidized Direct Loans
 Interest accrues on loan
while student is enrolled in
school
 Student has option to defer
or pay interest while in
school
 1.073% origination fee
withheld by US Dept. of
Education prior to
disbursement
 2015-2016 Interest Rate is
4.29% (fixed)
Annual Direct Loan Limits
Academic
Level
Annual Limit
(Sub & Unsub)
Additional
Unsub Limit
Freshman
$3500
$2000
$5500
Sophomore $4500
$2000
$6500
Junior/
Senior
$2000
$7500
$5500
Total Annual
Limit
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Aggregate (Lifetime) Direct Loan Limits
Status
Subsidized Limit
Undergraduate
$23,000
Dependent
Combined Limit
$31,000
Undergraduate
Independent
$23,000
$57,500
Graduate
Student
$65,500
$138,000
LPL Financial Member FINRA/SIPC
PLUS Loan for Parents
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Apply at www.studentloans.gov
Origination Fee of 4.292%
Interest rate for 2015-2016 = 6.84%
Can borrow up to the Cost of Attendance minus
other aid
Credit Check required
LPL Financial Member FINRA/SIPC
Which University Is More Expensive?
University A
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COA
EFC
FN
University B
$25,000
-10,000
15,000
Loan
Grant
Scholarship
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Un-Met Need
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Real $ Cost
2,000
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COA
$45,000
EFC
- 10,000
FN
35,000
Loan
3,000
Grant
12,000
Scholarship 20,000
Un-Met Need
0
17,000
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Real $ Cost
5,000
2,000
6,000
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13,000
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Where does your portion come from?
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Savings account
Checking account
Money Markets
Stocks
Bonds
Mutual Funds
Students savings
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529 plans
UTMA/UGMA
Life Insurance
IRA
401K/403B
Real Estate
Annuities
LPL Financial Member FINRA/SIPC
Financial Aid

Requires the understanding of:
Forms required by the school (FAFSA, Profile)
 Knowing your EFC
 Prudent planning strategies to increase financial aid
eligibility
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Need to know:
Average % of Financial Need met by the university
 The university’s 4 and 6 year graduation rates
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LPL Financial Member FINRA/SIPC
Planning
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Effective planning for financial aid occurs before filing
FAFSA/Profile – NOT AFTER!
DO NOT PROCRASTINATE! - Early planning gives you
the best chance to position yourself for financial aid
Learn as much as possible about the financial aid
process and seek out the assistance of experts in the
field for guidance
LPL Financial Member FINRA/SIPC
LPL Financial Member FINRA/SIPC