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Financial Aid Tip of the Month

money-graphic-2Star Staff Reports

Federal student aid programs can help pay college costs
The federal government sponsors numerous financial aid programs that can help students and their parents pay college expenses. This brief summary from KHEAA describes the more common federal grant and loan programs. Grants generally do not have to be repaid, but loans do.
·         Federal Pell Grant: Pell Grants provide up to $5,730 per year for undergraduates with financial need. The amount may change this year.
·         Federal Supplemental Educational Opportunity Grant: grants that provide up to $4,000 per year for undergraduate students who have exceptional financial need.
·         Federal Perkins Loan: loans for students with exceptional financial need. Undergraduates can get up to $5,500 per year, while graduate students can get up to $8,000 per year.
·         Direct Subsidized and Unsubsidized Loans: These loans, also called Stafford Loans, are available to undergraduate, graduate and professional students. The amount students may borrow depends on their year in school.
·         Federal PLUS Loan: Parents of dependent undergraduate students may qualify for PLUS Loans, depending on the parents’ credit ratings. The amount available depends on how much other financial aid the student receives. Graduate and professional students may apply for PLUS Loans if they have exhausted their Subsidized and Unsubsidized Loan eligibility.
The Free Application for Federal Student Aid (FAFSA) is used to apply for all of these programs. Families seeking a PLUS Loan must also submit a separate application.
KHEAA is a public, non-profit agency established in 1966 to improve students’ access to college. It provides information about financial aid and financial literacy at no cost to students and parents. KHEAA provides the ThinkAhead Net Price Calculator to universities and colleges. The calculator, available on a school’s website, lets students and parents determine their out-of-pocket costs for attending that school. KHEAA also helps colleges manage their student loan default rates and verify information submitted on the FAFSA.
In addition, KHEAA disburses private Advantage Education Loans on behalf of its sister agency, KHESLC. For more information about Advantage Education Loans, visit www.kheslc.com.
Money Tips for Students, February 2015
Understanding pay stubs
When you work, your employer will give you a pay stub when you get paid, even if you use direct deposit. Understanding the information on the pay stub is vital to managing your money and budgeting.
Each company’s pay stub is different, according to KHEAA, but all employers must include these items:
·         Gross Pay: This is what you earned that pay period before any taxes or benefits, such as insurance, were withheld.
·         Net Pay: This is your take-home pay after all the taxes and benefits have been deducted from your gross pay.
·         Federal Tax Amount: Federal income tax might be abbreviated as Fed Tax, FT or FWT. This is how much was withheld to pay your federal taxes, based on the W-4 form you filled out when you were hired.
·         Local Tax: Some cities, counties or school districts may require you to pay a local tax. You may not have this tax withheld if you don’t live or work in an area that assesses these taxes.
·         Social Security Tax: Social Security tax might be abbreviated FICA, SS, SSWT or OASDI. The federal government requires that 6.2 percent of your wages be withheld.
·         Medicare: Medicare tax might be abbreviated MWT or Med. Like Social Security taxes, the federal government requires that 1.45 percent of your wages be withheld.
·         Year-to-date (for pay and deductions): The year-to-date fields show how much you have earned up to that point, as well as what has been deducted for each tax or benefit.
KHEAA is a public, non-profit agency established in 1966 to improve students’ access to college. It provides information about financial aid and financial literacy at no cost to students and parents. KHEAA provides the ThinkAhead Net Price Calculator to universities and colleges. The calculator, available on a school’s website, lets students and parents determine their out-of-pocket costs for attending that school. KHEAA also helps colleges manage their student loan default rates and verify information submitted on the Free Application for Federal Student Aid (FAFSA).
In addition, KHEAA disburses private Advantage Education Loans on behalf of its sister agency, KHESLC.
For more information about Advantage Education Loans, visit www.kheslc.com.

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