college board trends in student aid total aid awarded $134.8 billion graduate & undergraduate...
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College Board TRENDS IN STUDENT AID
• Total Aid Awarded
$134.8 BillionGraduate & Undergraduate
• 51% or 69 Billion in Loans(FFELP and Direct)
– Undergrad Annual Average• $3,074 Subsidized• $3,398 Unsubsidized
http://www.collegeboard.com/press/releases/150634.html
College Board TRENDS IN STUDENT AID
• PARENT LOANS
– 820,000 Borrowers
– $9,984 Average Loan
http://www.collegeboard.com/press/releases/150634.html
College Board TRENDS IN STUDENT AID
• PELL GRANTS– # Recipients
•2004-05 3.0% Increase•2005-06 1.5% Increase
– Average Award•2004-05 $2,474•2005-06 $2,354
http://www.collegeboard.com/press/releases/150634.html
College Board TRENDS IN STUDENT AID
• PELL GRANTSAs a result of the lower average Pell Grant,
the percentage of tuition, fees, room, and board covered by the maximum Pell Grant at the average public four-year college,
DELCINED by 9 percent from 2001-02 to 2005-06.
http://www.collegeboard.com/press/releases/150634.html
College Board TRENDS IN STUDENT AID
• PRIVATE LOANS
– Total Volume 2005-06 = $17.3 Billion
– 27% average annual growth since 2000-01
– Accounted for 20% of all borrowing in 2005-06
http://www.collegeboard.com/press/releases/150634.html
College Board TRENDS IN STUDENT AID
• STUDENT DEBT
• $19,300 Median student debt 2003-2004 bachelor’s degree
• $24,600 Student borrowers graduating in 2004 from for-profit colleges had the highest median debt, followed by
• $19,500 students from private nonprofit colleges
http://www.collegeboard.com/press/releases/150634.html
College Board TRENDS IN STUDENT AID
• STUDENT DEBT• Graduate student borrowing
is increasing more rapidly than undergraduate student borrowing;
• The fastest growing student aid program over the decade was Parent Loans for Undergraduate Students (PLUS).
http://www.collegeboard.com/press/releases/150634.html
College Board TRENDS IN COLLEGE PRICING
• TUITION & FEES2006-07 – 4-Year Public Tuition
Avg. = $5,836 2.4% Increase
- 4-Year Private Tuition- Avg. = $22,272 2.0%
Increase
http://www.collegeboard.com/press/releases/150634.html
Total tuition, fee, room, and board charges for undergraduate in-state students at public institutions, now average $12,796—up $669 from the previous year.
College Board TRENDS IN COLLEGE PRICING
• UNDERGRADS (Public &
Private)
COSTS (Tuition & Fees)
•42% < $ 6,000•13% > $24,000
4-Year PublicNet tuition & fees = $2,700
http://www.collegeboard.com/press/releases/150634.html
College Board EDUCATION PAYS
2005, median earnings for bachelor’s degree holders
between the ages of 25 and 34 working full-time
were $13,900 higher than median earnings of high school graduates working full-time
http://www.collegeboard.com/press/releases/150634.html
Higher Education Reconciliation Act of 2005
• Signed by President Bush 2/8/06 (Senate Bill 1932)
• The bill authorized PLUS Loans for graduate/ professional students
• All terms & conditions of PLUS Loan for parents are identical for graduate/professional students
Graduate PLUS Loan• Terms & Conditions
– Fixed Interest Rate of 8.5%
– 3% origination fee will be deducted from the loan proceeds at disbursement and paid to the Department of Education
– Up to a 1% default fee may be charged by the guarantor and will be deducted from the loan proceeds at disbursement
Graduate PLUS Loan
• Terms & Conditions– Students must complete
the (FAFSA) Free Application for Federal Student Aid
– Students must apply for their annual loan maximum eligibility under the Federal Subsidized and Unsubsidized Stafford Loan Program before applying for the Graduate PLUS Loan
Graduate PLUS Loan
• Terms & Conditions
– Determination that student does not have adverse credit via credit check; no income requirement; no co-signer requirement
– Maximum loan amount equal to cost of attendance minus other financial aid received
Graduate PLUS Loan
• Terms & Conditions
– Multiple disbursements may be required depending upon the school attended
– Interest accrues from date of disbursement
Graduate PLUS Loan• Terms & Conditions
– In-school deferment available while student is enrolled at least half time
– Various deferment and forbearance options are available if student has difficulty repaying loan; interest will continue to accrue
– Death and Total Disability benefit
Graduate PLUS Loan
• Terms & Conditions
Repayment begins 60 full days from disbursement
(unless student remains enrolled at least half-
time)
– 10 year repayment period
– Flexible repayment options
• Standard• Extended• Graduated
Application Process• Credit pre-approval
(web or phone)
• Master Promissory Note – legal commitment to repay loan
• Lender sends request to school to certify student’s eligibility for the loan
• Schools may certify Graduate PLUS Loans beginning 7/1/06
• Lender disburses funds to school based upon recommended dates from school that follow Federal guidelines
Graduate PLUS vs. Private Loans
• If a graduate student has limited or no credit history, it may be more difficult to qualify for a private loan
• Graduate PLUS Loans have no income requirement and no co-signer requirement
• Graduate PLUS Loans will have a fixed interest rate,
• while private loans typically do not have an interest rate cap
Graduate PLUS vs. Private Loans
• Graduate PLUS Loans may
charge up to 4% in fees • Private loan fees may vary
• Graduate PLUS Loans offer flexible repayment options such as Standard, Extended and Graduated;
• Private loans typically offer only Standard repayment option
• Forbearance option available for Graduate PLUS Loan borrowers that have difficulty repaying loan
Graduate PLUS vs. Private Loans
• Graduate PLUS Loans offer Death and Total Disability benefit that is
• typically not available for private loans
• Graduate PLUS Loans may be consolidated into a Federal Consolidation Loan
Graduate PLUS Loan
QUESTIONS
&
DISCUSSION
Graduate PLUS Loan
DAVE RICE
St. Louis College of Pharmacy
drice@stlcop.edu
(314) 446-8320
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