Cost of Attendance
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EnglishVoice Age
Middle Aged (35-54)Accents
North American (General)Transcript
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there is a simple equation on the screen. The cost of attendance minus the amounts paid, equals the amount to borrow. At least it seems simple. But unless you look closely at the first line, the cost of attendance and think about what is included, you could end up borrowing more money than you need to borrow. If you have ever had alone before, you know that borrowing too much has consequences. This media piece is intended to help you gain a better understanding of the elements of your financial aid package, including your cost of attendance so that you have a much better idea of how much money you need to borrow. Let's look a bit closer at a sample cost of attendance statement for enrolling at Capella University for a 10 week academic quarter. The format of the statement is the same standard format that is used for colleges and universities all over the United States, which enables schools to follow similar guidelines based on a learner's completion of the FAFSA or the free application for federal student aid. But because Capella is an online university, some of the lines on the CEO a may not apply to your situation to help you make a good financial decision. Let's take a closer look at what this statement is likely to mean to you. Row one lists the estimated cost of books and supplies for an online course. This translates to the cost of accessing study materials, which may be E books, library readings, outside software or textbooks that are delivered to you. You will need to allow for this cost, since it's hard to imagine succeeding without access to the texts. Road to lists an amount allowed for computer expenses. If you don't have access to a computer that meets the required standards, you will have to get access. This amount essentially assumes you are paying someone for that, perhaps an installment loan or some type of rental. But if you already have a computer that meets the standards required for your coursework, you may not have expenses in this category, and that means almost $200 per quarter, which you won't need to borrow. And if you don't borrow that money, you also won't pay interest on that amount. Rule three, on the other hand, is probably not something you can avoid if you are beginning some type of loan. This is what the lender refers to as origination fees or booking fees. This is not the same as interest, which is charged over time. This is a fee for handling. The process is required to get your loan started. Rose four and five are worth thinking about. Obviously, you're not planning to move closer to campus in order to take classes at Capella so you won't have any new room and board expenses to take courses. Are you planning to cut back on your work time so that you will be earning less? If so, you will want to figure out how much less you expect to earn and factor in that amount as a more realistic number here. The point is that you don't want to be borrowing money and paying interest for an expense that is no different than what you would be handling without taking courses. Rose. Six is similar to rose four and five. Do you currently have Internet access that you are already paying for out of your existing sources of income? If you do, then unless there is some reason that this cost will go up when you start classes or your income will go down. You probably don't want to borrow money for this either. Rose seven is your cost of taking courses, the tuition and related fees and is the main cost of attending an online school. If you don't have sufficient personal funds or employer tuition assistance or scholarships or grants to cover this amount, then this is the amount for which it probably does make sense to use alone. Now let's step back and look at what this really means to you in this sample case, out of nearly $9000 that this learner could have borrowed, half of the cost amounts to current living expenses. So even if this learner has no tuition assistance from any other source, the real cost of attendance is just under $4400. Time to focus on what this means to you, starting with language and terminology. One of the terms that the government uses and therefore colleges and universities use is financial aid. What do you think that means? Choice. A. Tuition assistance from employers is considered part of your financial aid award, and you are required to report it to your school in choice be. Scholarships and grants are universally considered to be part of your financial aid package, so Choice B is correct, although it is not the only choice that is correct in choice. See, federal Stafford loans are actually considered financial aid. There are loans, though not grants. You do have to pay them back, and you do have to pay interest on whatever amount you have not yet paid back, According to those who work directly with learners, this is one of the greatest sources of confusion among learners today. Unfortunately, a potentially expensive confusion. Yes, the correct answer to the question is actually Choice D, because A B and C are referred to as financial aid, even though C must be paid back with interest, let's summarize the key points we've made so far. One. Even though a line item is listed on your official CEO, a statement. It may not be a new or additional costs that you have to pay to. Even though you have been offered a federal loan amount as part of your financial aid, you do not need to actually borrow the full amount or even any of the amounts. Three. Borrowing less money will save you money in two ways. First, you won't have to pay it back. Second, and maybe most important, you won't be charged interest on it. How much money could you save? Using our example, let's say that you actually did borrow the full amount offered $8702 per quarter. If you did that for 4/4 in a year, you would have borrowed a total of $34,808 that year. You would eventually have to pay all of that back, of course, but that's just the beginning. If you borrowed at 3.4% per year, the subsidized rate for undergraduates, you'd also have to pay interest every year after you complete your degree or stop attending school, at least on the amount that you had not yet paid back. That means that you would owe $34,808 plus $1183.47 or a total of almost $36,000 for just your first year's work. And, of course, that's just the beginning. Each year that there remains an unpaid balance on your loan. You'll owe interest in addition to showing the outstanding balance. And what if you are a graduate student and your federal Stafford loan rate is 6.8% per year, you guessed it twice a much interest every year, or $2366 in 94 cents. In our example, that means that you would actually owe $37,174.94 for that first year. And if you are a graduate student, the interest starts adding up the day the loans are paid to your school rather than on Lee after you are done with your program. On the other hand, if you borrowed on Lee the $4366 that was really needed in the example, your loan amount for that first year would amount to 1/2 or $17,344 and the interest you would owe for just the first year would be lower as well. Less than $600 if your rate is 3.4% or just under $1200. If your rate is 6.8%. In other words, borrowing on Lee What you need in the example amounts to getting two years of courses for the price of one. Ultimately, it's all about your future. Are we suggesting that you shouldn't borrow money? Not really. Completing a degree or an advanced degree generally does lead to significantly higher income over a lifetime. But it is all about how you pay for that degree, a decision which you have to make before you get the degree. What we're saying is simple. If you don't borrow more than you need now, you'll find yourself in a better financial position a lot sooner.