Financing Your Education

Transcription

1 Providence, Rhode Island Financing Your Education

2 At Providence, one of every three dollars is spent on financial aid... Resources Families Use to Finance a PC Education 48 % 1 % 8 % 29 % 10 % 2 % 2 % Federal Work Study Parent Borrowing Student Borrowing* Family Income and Savings Federal Grants Outside Grants and Scholarships At Providence, one of every three dollars in the operating budget, or nearly $50 million, is spent on financial aid, and nearly three of every four students receive some scholarship help. The average direct scholarship based on need last year was more than $17,500. (Students who also qualified for merit-based aid, which not all colleges offer, received substantially more.) New York Times / April 29, 2010 Providence College Grants and Scholarships *Student Borrowing reflects all sources (need-based loans and alternative financing borrowed by the student) You re looking for a college with a national reputation for excellence. You want your children to receive a transformative education. You want them to belong to a community that shares their values, yet challenges them through endless opportunities to learn, participate, and serve. You want them to thrive academically, personally, and spiritually as they grow into successful, well-rounded adults. But while you re deeply committed to investing in the college that fits them best, you have plenty of questions. How can you come up with a financial plan that works best for you? What kind of assistance can you expect from us? Here are some of the answers you seek. We urge you to contact us for more information on the many resources available to your family at Providence College. We recognize that meeting the costs of a college education is a challenge for most students and families, particularly in this economy. Providence College has a long-standing commitment to making a quality education more accessible to students and their families, and it is our hope that in addition to the information presented here you will contact us to find out more about our extensive, comprehensive financial aid program. We eagerly look forward to helping you create a financial plan uniquely suited for your family s needs and circumstances through our various institutional merit- and need-based scholarships and grants as well as federal loan, grant and employment opportunities. Sandra J. Oliveira Executive Director / Office of Financial Aid

3 Paying for Providence College the Flaherty Family We were kind of naïve about how much college costs, recalls Linda Flaherty. Emilee was an excellent student and we d assumed we d be in a much better position in terms of scholarships than we ended up being. So it was a sharp learning curve for us. While Providence College offered an excellent program in accounting Emilee s major of choice Linda freely admits Providence was not their family s first choice. But as soon as we were on campus, I immediately felt this was the right fit for Emilee it had something to do with the sense of community and the values everyone seemed to share. Of course, we allowed her to make the final decision. Also, we don t come from money and we have a son who will be ready for college in a few years, so the financial component was huge for us. We felt it was our responsibility to ensure Emilee didn t begin life with a huge debt. At the same time, we wanted a college that was the right fit for her. Luckily, she ended up receiving a financial aid package of approximately $33,000 ($23,000 grant, $7,500 loan, $2,500 work study) from Providence, and we helped her take out an alternative student loan for the balance. She s responsible for half of that loan and we ve refinanced our home to pay for the other half. It s definitely all been worth it when I think of the amazing impact Providence has had on her both as a student and as a person. Given the College s track record, I know that she will graduate to an excellent, wellpaying career and a well-rounded, meaningful life. the Bernazzani Family While passionate about helping their daughter, Michelle, find the college that fit her best, Mark and Paula Bernazzani also knew that, as a family, cost inevitably would be a significant factor. And they also wanted Michelle to take some responsibility for her own education. I remember many long discussions over our kitchen table, says Mark. Paula and I would keep pointing to the amount of debt Michelle would graduate with, so she was fully aware of the responsibilities that accompanied the privilege of attending a college of her choice. Once she chose Providence, which had offered her approximately $13,900 in annual financial aid ($6,600 grant, $5,500 loan, $1,800 work study), we broke down the cost, year-by-year, and began exploring the many different options available. We knew what we needed was a lender who would not only offer us the lowest rate of interest but also accommodate a deferred payment schedule. I think the key is to start planning early, adds Mark. Paula and I wanted to pay for at least two years of college for Michelle, so we refinanced our mortgage to a 15-year schedule many years ago. Now, thanks to Providence College; a lowinterest, deferred-payment loan from the Rhode Island Student Loan Authority (RISLA); and a very manageable, low-interest home equity loan, we ve been able to do just that. Providence offered our daughter a very generous financial aid package. Most important of all, Providence is absolutely giving her the education she deserves. Linda Flaherty / Mother of Emilee Flaherty 12 The true measure of our investment is that Michelle has been extremely happy with her Providence College experience so far, and we ve been very happy with the quality of the education she s received. Mark Bernazzani / Father of Michelle Bernazzani 11

4 Providence College Need-Based and Merit-Based Financial Assistance How Providence College Awards Need-Based Aid In determining aid packages for prospective undergraduate day students (including transfer applicants), Providence College distributes financial assistance consisting of work, loan, grants, and scholarships based on a number of factors, including federal policy, institutional policy, and the availability of resources. Providence College uses Federal Methodology (FM) required by the Higher Education Act (1965), as amended, to determine a student s eligibility for all federal financial aid programs and, based on the information provided on the Free Application for Federal Student Aid (FAFSA), distributes federal financial aid to eligible students. For institutional need-based aid, the College s Institutional Methodology (IM) uses the information provided on the College Scholarship Service (CSS) Profile application to provide a systematic, objective measurement of a family s financial situation to determine the amount of aid truly needed. Need-Based Grants All institutional need-based grant monies are awarded to undergraduate students on the basis of financial need. The range of need-based grants provided to students in the Class of 2017 was approximately $1,000 to $42,385. For more information, visit: The Rev. Dr. Martin Luther King, Jr. and Cunningham Scholarships Based on demonstrated financial need, these scholarships are specifically for multicultural students. Awards typically range from one-half to full tuition. How Providence College Awards Merit-Based Scholarships As part of the review for admission to Providence College, candidates with superior academic and leadership credentials are referred to the Committee on Scholarships for consideration for all merit awards. (No separate application is required for any merit award.) Providence College offers three types of merit scholarships to qualified students: Liberal Arts Honors Program Scholarships Academic Scholarships Friar Scholarships Liberal Arts Honors Program Scholarships Providence College s Liberal Arts Honors Program is highly selective, with approximately 10 percent of students in a typical class invited upon admission. While admission to the College employs a holistic review process that considers each student s academic record, extracurricular accomplishments, and personal qualities, admission to the Honors Program focuses specifically on the student s academic credentials. Students who are invited into the Honors Program typically have completed their high school s most rigorous program of study and place at the top of their graduating class. These students are awarded merit scholarships ranging from 40% to 100% of the cost of the year s tuition. Qualified students may renew their Honors Program scholarships annually for up to four years. To be eligible for renewal, a student must maintain the required GPA. Exceptional first-year students may apply to the Director of the Liberal Arts Honors Program for entry beginning in the sophomore year. These students must have demonstrated outstanding academic performance during their freshman year. Although they may be invited into the Honors Program, they will not be eligible for Liberal Arts Honors Program Scholarships. Academic Scholarships Students who have demonstrated superior academic performance throughout high school, but who have not been invited into the Liberal Arts Honors Program, may qualify for an Academic Scholarship. To be considered for Academic Scholarships, students should complete a rigorous program of study and have a cumulative academic average of at least an A-. Academic Scholarships are renewable annually up to four years, provided that the recipient maintains the required GPA. Friar Scholarships At Providence College, we also provide merit awards for high school students who demonstrate an involvement in extracurricular pursuits that goes beyond the norm. These students exemplify what it means to be a Providence College Friar. Rather than focus on the number of activities in which a student has participated, the Committee on Scholarships is interested in the depth of the student s involvement and the seriousness of the student s commitment. Friar Scholarships of up to $9,000 annually are awarded to entering freshmen who demonstrate extraordinary leadership, commitment, and responsibility in their extracurricular activities. Additional Information Students may receive only one type of merit-based scholarship. Students do not need to fill out a need-based scholarship application to be considered for a merit-based scholarship. Total tuition awards cannot exceed the full cost of annual tuition; if another source of funding is designated for tuition, a student s merit award may be reduced.

5 Federal Loans and Work Study Important Borrowing Tips William D. Ford Federal Direct Stafford Loan Program Commonly referred to as the Direct Stafford Loan Program, the U.S. Department of Education has created this program specifically for students who are attending postsecondary institutions. Providence College is responsible for determining eligibility based on the results of the FAFSA and current federal regulations. In addition, the College also collects and processes all paperwork on the government s behalf for this program. These loans are taken out in the student s name, and there is no credit check required to qualify for this program. Subsidized Direct Stafford Loans are need-based and do not accrue interest Alternative Financing Options The calculation used to determine a family contribution is designed to measure a family s ability to contribute to educational expenses over a period of time. For the majority of families, most of the contribution is expected from income. Savings and/or loans assist families in managing the cost over a period of time, particularly for those families who have other financial demands. After you ve determined what you can manage and assessed the amount your family needs to finance your student s Providence College education, there are several financing options you can pursue, including: Payment Plan. Providence College contracts with Tuition Management Systems (TMS) in order to offer a monthly payment plan option for you and your family. The plan offered by TMS allows families to spread all, or a portion, of a student s balance due over a full year. There is a nominal fee but no interest charges for those families who wish to enroll in this service. The amount you wish to finance over the 10-month plan is up to you. Should you be interested in this program or would like additional information, please contact the Bursar s Office at while the student is enrolled at least halftime. Interest will accrue for students borrowing Unsubsidized Direct Stafford Loans which can be paid on a quarterly basis while the students are in school, or they can opt to have the interest capitalize (added to the principal) and payable when they graduate or drop below half-time. Federal Perkins Loan A Perkins Loan is awarded to undergraduate students with exceptional financial need. This is a campus-based loan program, with the school acting as the lender using a limited pool of funds provided by the government. Essentially, it is a subsidized loan with the interest being paid by the federal government while the student is in school. There are Direct PLUS Loan. The Parent Loan for Undergraduate Students (PLUS) is a federal loan available to the student s parent. Loans are in the parent s name on behalf of the student and based on the credit history of a parent. Parents can begin repayment on the principal and interest 60 days after the loan is fully disbursed (i.e., approximately March of the freshman year), or six months after the dependent student graduates or ceases to be enrolled on at least a halftime basis. Interest will accrue on this loan while the student is in school, and it is suggested that it be paid on a quarterly basis to the lender who holds the loan. There is usually an up-front processing fee valued anywhere from 2% to 4% of the total loan amount. Direct PLUS loans are offered by the U.S. Department of Education and administered by our Student Loan Office. Providence College requires all families who apply for a Direct PLUS loan to complete a current year FAFSA application, even if the family is not interested in receiving other federal student aid. Alternative Student Loans. These are education loans that a student borrows after considering financial aid and family financial support. While students are the primary borrower for this type of loan, a creditworthy cosigner a parent no origination fees, and the interest rate is fixed at 5%. Federal Work Study Federal Work Study (FWS) is a unique component available in the federal student aid program that affords students the opportunity to earn funds throughout the academic year to support some of their educational-related expenses. It is important to remember that FWS funds are not credited to the student s bill and being offered FWS as part of their award package does not guarantee a student a job. Students are responsible for securing their own employment and should be proactive in their search. Please note, priority for student employment is given to those students who have been awarded FWS. or guardian in most cases is required. Often, lenders will relieve cosigners of their obligations once the student has made a specified number of on-time payments. While the principal amount you borrow does not become due until the student graduates or drops below half-time, interest will accrue on this loan while the student is in school, and it is suggested payments be made on a quarterly basis to the lender. Interest rates change on a quarterly basis for alternative student loans since they are driven by the LIBOR or Prime rate. Please note, Providence College does not have a preferred lender list and cannot legally recommend a lender to you. Families are encouraged to utilize the Internet to research and compare different products. Furthermore, many state lending agencies may offer loan products at reduced rates to its residents. Contact your home state lending authority for more details. Home Equity Loans. Home equity loans are another attractive financing opportunity because of the tax benefits associated with the interest payments. Consider spreading all or a portion of your payments over time through Tuition Management Systems (TMS). A federal student loan, such as the subsidized or unsubsidized Stafford Loan, is generally the best option for students. Interest rates are lower than parent or alternative options. Consider applying for a federal Parent Loan for Undergraduate Students (PLUS), even if you believe you will be denied, as these generally have more flexible credit criteria than private loans. Borrow only what you think you will need for the entire academic year (and not per semester). Every family s needs are different. When it comes to selecting a lender and loan product, families need to keep in mind that there is not a one-size-fits-all option. Research loan products each year since other lenders may offer different interest rates and/or incentives in future years. Apply for one loan at a time. A lender runs your credit (at your request) each time you apply which means that the more loans you apply for at the same time, the lower your credit score. A low credit score could impact your ability to borrow. Choose your lender carefully, check for fees that may reduce a portion of your loan that will be applied to direct expenses, and remember to read the fine print on each document you sign! Ask the important questions of your lender. What kind of up-front fees do they charge, and what rebates do they offer? What are your repayment options? How much will you owe if you re in repayment only after graduation? What are the estimated The Cost of Attendance, also known as your budget, is an itemization of total expenses a student would typically incur in a given academic year at Providence College, including both direct expenses that appear on your student billing statement and indirect expenses that do not (e.g., books, personal expenses, etc.). When financing, you are able to borrow up to your student s budget minus any other financial aid or resources you are receiving. If you decide to borrow up to the full cost of education, you may borrow a little more than your student s direct charges and apply the remainder toward the other costs he/she may incur throughout the academic year. Alternative Financing Comparison Chart Program Loan Amount Interest Rate Monthly Principal/Interest Tms (Payment Plan) $20,000 0% $2, Parent Plus Loan $20, %* $ Alternative Loan $20, %** $ Home Equity Loan $20, %*** $ * This rate represents the Direct PLUS Loan offered through the U.S. Department of Education. ** This rate reflects Prime as of 9/5/13 (3.25) plus 7%. Your rate may vary due to credit history and lender you have selected. *** This rate is only an example. Please contact your preferred lending institution for a current rate. Repayment Term (Months) monthly payments? Do you want a fixed or variable rate? If it s variable, how often can the rate change, and is there an interest cap? Can you consolidate loans later without losing any incentives on the original loan? Will your loan be sold to another company? Keep in mind that alternative loan products have no limit on how high their annual interest rate can go unless the product you have chosen offers a fixed interest rate. Know what it means to cosign cosigning for a private loan and borrowing a PLUS loan both impact your credit report; both constitute debt for which you are responsible. Search for outside scholarship options that can assist in reducing the amount that you may need to finance and borrow and which also will assist with reducing long-term loan debt.

6 Case Studies in Financial Aid Packages Every family s financial situation is different, yet there are similarities in how various families approach financing their students Providence College education. The following examples illustrate how needbased financial aid and payment options work together. These case studies consider several variables used to determine a family s college contribution and financial need, including: income, annual taxes, assets, household size, and number of children in college. Even though your family situation may resemble one of these case studies, it s important to note that Providence College cannot guarantee that your student will be offered a similar aid package. These case studies are examples only. Please note that Providence College may not be able to meet every student s demonstrated need in full. In determining total financial need, please keep in mind the following formula: Cost of Attendance Expected Family Contribution = Financial Need For the examples below, we assume that the total Cost of Attendance = $57,800. The total Cost of Attendance includes all direct (e.g., tuition, room and board, fees, etc.) and indirect expenses (e.g., books, supplies, travel to and from home, etc.) that a student could expect to incur for the academic year. Case Study 1: Rachel Case Study 2: John Case Study 3: Chris Case Study 4: Kathleen Rachel lives in New York with her parents and three younger siblings (ages 12, 14, and 16). Her parents total income is $218,102. The family has $126,000 in home equity and $6,000 in savings. Providence College calculated that Rachel s parents could contribute $49,070 toward her education for the current year. Rachel s financial need is determined as follows: Educational Expense Budget/Resident $57,800 Less family contribution - 49,070 Financial need $8,730 Rachel s need-based financial aid package includes: Providence College Grant $5,230 Total aid package $8,730 In addition to a Providence College Grant, Rachel is eligible to receive a $2,000 unsubsidized Stafford Loan for her first year. This loan is unsubsidized because the Providence College Grant and unsubsidized Stafford meets Rachel s financial need in full. The loan will assist the family with their share of the contribution toward educational expenses. Since the $2,000 Stafford Loan will accrue 3.86% interest while Rachel is in school, the family is advised to make quarterly interest payments ($6.43/month). Rachel s parents also intend to borrow $43,000 in a Federal PLUS Loan to finance their contribution. Their PLUS Loan payments will be $464.75/month. The total monthly payment for both loans (the PLUS Loan payment and the unsubsidized Stafford Loan interest payment) is $ Next year, Rachel s sister will enter college. Assuming that the family s income remains the same, their contribution for Rachel s education will be approximately 50% lower, and she will be eligible for additional need-based grant funds for her sophomore year. John lives in Massachusetts with his parents and three sisters. John s older sister also attends college. His parents combined income is $205,500. They own a home with $422,000 in equity and have savings of $30,000. Providence College expects John s parents to contribute $31,035 and John to contribute $2,300 from his own savings and summer earnings. The total family contribution for the academic year is $33,435. John s financial need is determined as follows: Educational Expense Budget/Resident $57,800 Less family contribution - 33,435 Financial need $24,365 John s need-based financial aid package includes: Providence College Grant $15,840 Perkins Loan $2,000 Work-Study Job1 $1,800 Total aid package $23,140 John received a need-based award of $15,840, a Perkins Loan of $2,000, and the maximum subsidized Stafford Loan of $3,500. In addition to his aid package, he is eligible for an unsubsidized Stafford Loan in the amount of $2,000 for his first year. John s loan will assist the family with their share of the contribution toward his educational expenses. Because the unsubsidized portion of John s Stafford Loan will accrue 3.86% interest while John is in school, the family is advised to make quarterly interest payments ($6.43/month). John will also earn $1,800 in a work study award on campus. John s parents have almost paid off their entire home mortgage, so they have decided to take a home equity loan. This home equity loan will help them manage the balance remaining to cover the combined educational expenses for both John and his sister, an amount in excess of $60,000. Their decision is partly based on the fact that the interest rate on a Federal PLUS Loan is 6.41%, while interest rates on home equity loans or refinanced mortgages can be several percentage points lower. Chris lives with his parents and three siblings in Maine. His parents combined earnings total is $91,235. They own a home with $125,500 in equity and have $300 in savings. Chris s brother is also enrolled in a four-year college. Providence College expects Chris s parents to contribute $8,350 and Chris to contribute $1,330 from his summer earnings. Chris s financial need is determined as follows: Educational Expense Budget/Resident $57,800 Less family contribution - 9,680 Financial need $48,120 Chris s need-based financial aid package includes: Providence College Grant $26,380 Work-Study Job $1,800 Perkins Loan $2,000 Total aid package $33,680 Outside Scholarship $3,000 Total aid package $36,680 On top of his financial aid package, Chris is eligible to receive an unsubsidized Stafford Loan in the amount of $2,000 for his first year. This portion of the loan is unsubsidized since his financial aid package already includes the maximum subsidized Stafford Loan of $3,500. This loan will assist the family with their share of the contribution toward educational expenses. Since interest will accrue at 3.86% on the unsubsidized portion of the loan while Chris is in school, the family is advised to make quarterly interest payments ($6.43/month). Chris has a work-study job that will provide him with $1,800 of income during the school year and a Perkins Loan of $2,000. He has also been awarded a $3,000 outside scholarship. Since his financial need was not met in full, he will be able to apply this outside scholarship to his unmet need. Chris and his parents will need to finance the parent contribution of $9,680 and his remaining unmet need, which is $11,440 ($48,120 financial need minus $36,680 in total paid). To assist the family in paying the remaining balance of $21,120, Chris s parents are combining two payment options. Through the Tuition Management Systems (TMS), they have budgeted $2,500 over 10 months, with a monthly payment of $250. They will borrow the remaining $18,620 from the Federal PLUS Loan Program, with monthly payments of $ a month. Chris and his parents will pay $467 for 10 months and $217 for the remaining two months to cover his first-year expenses. Kathleen s father is deceased, and her mother earns a modest income to help support a family of four children in Rhode Island. To help manage costs, Kathleen has decided to commute. The family s total income, including Social Security benefits for the younger children, amounts to $39,500. Kathleen s mother has $60,000 in savings and investments. Providence College calculated a parent contribution of $60 and expects $2,000 from Kathleen s summer earnings. Kathleen s financial need is determined as follows: Educational Expense Budget/Commuter $50,040 Less family contribution - 2,060 Financial need $47,980 Kathleen s need-based financial aid package includes: Providence College Grant $16,691 Federal Pell Grant $5,595 Federal Supplemental Educational Opportunity Grant $4,000 Work-Study Job $1,800 Perkins Loan $2,000 Total aid package $33,586 In addition to a $16,691 grant from Providence College, Kathleen has received two federal grants totaling $9,595, a Perkins Loan of $2,000 and a subsidized Stafford Loan of $3,500. She will earn $1,800 in a work-study job on campus. Kathleen is also eligible to receive an unsubsidized Stafford Loan in the amount of $2,000 for her first year. This portion of the loan is unsubsidized because her financial aid package already includes the maximum subsidized Stafford Loan of $3,500. Since her financial need is not met in full, she would be able to apply an outside scholarship to the unmet need. Interest on the unsubsidized Stafford Loan will accrue at 3.86% while Kathleen is in school. Kathleen s mother is advised to make quarterly interest payments ($6.43/month). The balance due to educational expenses will be paid out of student earnings and parent assets.

7 Remember these Dates October Oct. 1 CSS PROFILE available for completion November Nov. 1 Early Action admission application deadline December Dec. 1 Early Action and Early Decision CSS PROFILE deadline Early Decision admission application deadline Dec. 15 Early Action and Early Decision business tax return information due to the Office of Financial Aid January Jan. 1 Free Application for Federal Student Aid (FAFSA) is now available for completion Early January Early Decision admission decision letters released (all merit-based and need-based awards included) Early Action admission decision letters released (all merit-based awards included) Jan. 15 Regular Decision admission application deadline Late January Early Action need-based financial assistance released February Feb. 1 Early Action, Early Decision & Regular Decision FAFSA deadline Feb. 1 Regular Decision CSS PROFILE deadline Feb. 15 Regular Decision business tax information deadline to the Office of Financial Aid Enrollment deposit deadline for Early Decision applicants March Mid- Regular Decision admission decision letters, merit March awards and need-based financial aid awards released April April 15 Returning student FAFSA due Returning student CSS PROFILE due May May 1 Enrollment deposit deadline for Early Action and Regular Decision applicants June June 1 First payment due if participating in the TMS payment plan July July 1 Direct PLUS applications are now accepted for processing July 15 Fall semester bills ed August Aug. 15 Fall semester bills due At a Glance 2017: Annual Costs Direct Expenses Tuition (Class of 2017)... $42,385 Room and Board*... $12,750 Fees**... $860 (Activity Fee $330, Technology Fee $400, Laundry Fee $130) Total Resident Cost: Billed Cost... $55,995 Indirect Expenses Books and Supplies... $900 Other Expenses... $909 Total Indirect Expenses... $1,809 * Amount reflects standard room and 19 meals. Returning students may choose a different living option and board plan. For a specific breakdown of associated expenses, visit our website: ** Lab fees, business school fees, music fees will apply on an individual basis. Class of 2017: Financial Aid Total Providence College Financial Assistance... $18.9 million Average Need-Based Financial Aid Package...$27,160 Average Need-Based Grant... $19,200 (including MLK/Cunningham) Average Merit-Based Scholarship... $17,720 % of Class with PC Need-Based Grant... 56% % of Class with PC Merit-Based Scholarship... 32% % of Class with PC Need-Based Grant and/or Merit-Based Awards... 75% Providence College admits students of any race, color, national and ethnic origin, sex, gender, sexual orientation, gender identity, religion, disability, age, or veteran status, and without regard to genetic information, to all the rights, privileges, programs, and activities generally accorded or made available to students at the College. It does not discriminate on the basis of race, color, national and ethnic origin, sex, gender, sexual orientation, gender identity, religion, disability, age, veteran status, or genetic information, in the admin istration of its education policies, admission policies, scholarship and loan programs, athletic and other College-administered programs, and employment policies. In accordance with Title IX, it does not discrim inate on the basis of sex in its educational programs or activities. Nothing in this notice shall require Providence College to act in a manner contrary to its Dominican mission and the teaching and tenets of the Catholic Church, and the College reserves the right to take actions designed to ensure and promote its Catholic and Dominican mission. Office of Financial Aid Harkins Hall 1 Cunningham Square Providence, Rhode Island P: F: finaid@providence.edu