OVERVIEW OF LESSON PLAN:
In this lesson, students create presentations for graduating seniors
about how to navigate the college financial aid system.
SUGGESTED TIME ALLOWANCE:
1 hour
OBJECTIVES:
Students will:
1. Estimate the costs of a college education and compare their estimates
to actual current and projected costs.
2. Learn about the college loan industry by reading and discussing
Lessons From the Loan Scandal.
3. Create a presentation for students about how best to navigate the
college loan industry.
4. Write an instructional brochure including the most important tips for
students and parents to know about financial aid.
RESOURCES / MATERIALS:
-pens/pencils
-paper
-student journals
-classroom board
-index cards (one per student)
-computers with Internet access (optional)
-copies of the article "Lessons From the Loan Scandal," found online at
http://www.nytimes.com/learning/teachers/featured_articles/20070730monday.html
(one per student)
ACTIVITIES / PROCEDURES:
1. WARM-UP/DO-NOW: Provide students with index cards on which to respond
to the following prompt (written on the board prior to class): How much
would you guess a private four-year college education costs per year on
average? What about a public four-year college education? Once each
student has written down their two guesses, collect all students
anonymous responses in a container. With help from several students,
write all of the estimates on the board from lowest to highest. Once all
estimates are recorded, write the actual average college costs for two
year, four year, state and private colleges for 2006-2007 on the board
(these can be found at
http://www.collegeboard.com/student/pay/add-it-up/4494.html). Were their
estimates close to the actual costs? Ask students: Were you surprised by
how much college costs? Do you think that these are fair prices? How do
people pay for college?
2. As a class, read and discuss the article "Lesson From the Loan
Scandal" from the beginning until the subheading Sam Is Your Best Rich
Uncle
(http://www.nytimes.com/learning/teachers/featured_articles/20070730monday.html),
focusing on the following questions:
a. What recent disclosures about financial aid officers have made loan
applicants wary?
b. What is meant by the comment that colleges and financial aid
officers can have competing interests ?
c. What are alternative loans?
d. What is a 3 percent fee at repayment ?
e. If and when you navigate this industry, would you feel intimidated or
confused? Why or why not?
Next, split students into seven small groups and assign to each one of
the remaining sections of the article to read and discuss, focusing on
the following questions:
Group 1: Sam Is Your Best Rich Uncle
a. Why should you never get a private student loan unless you have
exhausted your government student loans ?
b. Why do you think Mark Kantrowitz, publisher of FinAid.org, wonders,
Why would anyone ever get a private loan ?
c. What are Stafford, Perkins and PLUS loans?
d. What are some reasons that parents might not take out PLUS loans?
Group 2: For Rates, Expect the Worst
a. How do lenders assess student borrowers?
b. What does the greater the likelihood of default, the higher the
interest rate mean?
c. How many student borrowers receive the best rates? The worst rates?
d. What is Mark Kantowitzs rule of thumb when it comes to predicting
your rate?
e. How does your credit score influence what kind of rate you can get
from a lender?
f. How can your credit score be affected by comparison shopping?
g. Why do some lenders take academic markers into account?
Group 3: Not All Colleges are Equal in Lenders Eyes
a. What might account for the different loan shopping experiences of the
New York University student and the Florida Metropolitan University student?
b. Why is it important to note that Cindy Graysons Sallie Mae rejection
happened instantaneously ?
c. Do you agree with Ms. Grayson that If you dont need it, you can
have it. If you do need it, you cant have it ?
d. What do lenders mean when they say that they provide private money
only for colleges with which they have a relationship ?
e. Why are some officials concerned that students are treated
differently by lenders depending on which college they attend?
Group 4: You Will Be Confused
a. What is a margin ?
b. What made the loan offered by the lender MyRichUncle to the New York
University student so confusing?
c. How do you figure out the true borrowing costs that a lender is
offering?
d. What types of regulations have been placed on the student loan industry?
e. Why is it difficult to shop around for loans?
Group 5: The Preferred List Is (Still) Where to Start
a. What is the preferred lender list ?
b. How can one find out more about the lenders on the preferred list?
c. How were lenders chosen for the preferred list at the University of
California?
d. Into what four groups are borrowers classed?
Group 6: Consolidation Is No Longer a No-Brainer
a. What is consolidation?
b. Why did it used to be a good idea to consolidate student loans?
c. What has changed to make consolidation less desirable?
d. Why should borrowers refrain from consolidating federal and private
loans together?
e. Why are borrowers complaining to the Department of Education about
consolidation?
f. How are lenders making consolidation look appealing to borrowers?
Group 7: Pick a College (and Major) You Can Afford
a. What is Lewis Mandells advice to students choosing a college?
b. When does Mr. Mandell become concerned that a students loans are too
large for their career choice?
c. Why does Dawn Wooters believe that you need to have a realistic
concept and a backup plan ?
d. Do you think people should always do what they love ? Why or why not?
3. Once each group has read and discussed their section of the article,
inform the class that they will be creating a presentation for juniors
and seniors at your school on how to best navigate applying for student
loans. The presentation will have seven sections, and each group will be
responsible for creating one of these sections, based on what they
learned from the article subsection they just read and discussed.
Each group should answer the following questions in their presentation:
-In the part of the article that you read, what common problems were
faced by students and parents?
-What explanations and tips to students and parents were provided?
-What terms are presented in the article that borrowers would need to
understand?
Along with answers to the preceding questions, each presentation should
include a visual component (a chart or graph, a diagram or perhaps
images of lending Web sites paired with instructions on how to navigate
them), five to ten index cards with talking points for the presenters
and a glossary of terms (for help with this, direct students to
FinAid.orgs glossary of student loan and financial aid terms at
http://www.finaid.org/questions/glossary.phtml).
Some groups may need to conduct further research into their assigned
topic. If so, direct them to the U.S. governments student aid Web site
at https://studentaid.ed.gov and to http://www.finaid.org.
Once all groups have completed preparing their presentations and have
five to ten index cards, a glossary of terms and a visual aid, have them
give their presentation to the class. Instruct students to take notes
during the presentations because they will need to remember information
from other groups presentations to complete their homework assignment.
After each presentation allow time for students to ask questions of and
offer suggestions to the presenting group. You may wish to schedule a
time for your students to give their presentation to some of your
schools juniors and seniors.
4. WRAP-UP/HOMEWORK: Individually, students create an instructional
brochure to go along with the class presentation, for audience members
to take home. The brochure should highlight the most important tips that
students and parents should be aware of when applying for student loans.
DISCUSSION QUESTIONS:
-Why do you think college is so expensive in the United States?
-Do you think that cost deters people from attending college?
-Will you take tuition costs into account when you decide which college
to attend?
EVALUATION / ASSESSMENT:
Students will be evaluated based on participation in the warm-up
activity, participation in group and small group discussion, the
thorough creation of a presentation including five to ten index cards, a
visual aid and a glossary of terms and the thorough completion of an
informative brochure.
VOCABULARY:
acknowledges, assumptions, disclosures, junkets, kickbacks, courtesy,
criteria, assess, accounted, ultimately, scrambling, tuition,
intimidating, labyrinthine, daunting, exhausted, prominently,
delinquency, bankruptcy, default, asterisk, accreditations, exclusions,
redlining, capitalized
EXTENSION ACTIVITIES:
1. Research federally subsidized student aid. Create a chart explaining
how it works: where the money comes from, how the government subsidizes
it and how interest rates are kept lower than for other types of loans.
2. Create a college savings plan for a family that is about to have a
baby. When should they begin saving for college? Where should they save
their money (such as in a 529 plan)? How much will college cost when the
child turns eighteen?
3. Create a chart that compares various student loans with various
interest rates. Determine how much a recipient of each of these loans
would have to pay if he or she paid off the loan in 25 years.
