Financial Aid Resource Guide for Counselors 2012-2013 FAFSA

1. Financial Aid Resource Guide for Counselors2012-2013 FAFSA • Parts of this presentation come from the National Association of Student Financial Aid Administrators (NASFAA)

2. Financial Aid Basics and New Regulations

3. General Eligibility Requirements • Must be enrolled or accepted for enrollment in an eligible program of study, pursuing a degree, certificate or other recognized credential. • Must be a U.S. citizen or eligible non-citizen. • Must be registered with Selective Service – if male and required,males can register on-line at: www.sss.gov. • Must not have had eligibility suspended or terminated due to a drug-related conviction while receiving financial aid. • Must have a valid social security number . • May not be in default of a student loan or owe repayment of a federal grant. • Must meet Satisfactory Academic Progress as defined by college (Quantitatively-GPA Qualitatively-credit hours taken and completed.)

4. Types and Sources of Financial Aid TYPES: • Grants and Scholarships • Loans and Work – Self Help SOURCES: • Federal Government • State Government • College • Private Donors • Lenders

5. Federal Title IV Programs • Grants/Scholarships • Supplemental Educational Opportunity Grant (FSEOG) (Campus-Based) • Pell Grant • T.E.A.C.H Grant Self Help • Work Study (FWS) (Campus-Based) • Perkins Loan (Campus-Based) • Direct Loan • Parent Loan for Undergraduate Students (PLUS Loans)

6. Federal Pell Grant • Awarded to eligible undergraduates pursuing first bachelor’s or professional degree and certain students enrolled in post-baccalaureate teacher certification or licensing programs. Considered an “entitlement” program. • Actual award amount based on Cost of Attendance, Expected Family Contribution (EFC), and Enrollment Status. Unlike other financial aid, other aid that the student qualifies for will not affect the amount of the Pell Grant. • 5,550 Maximum 2011-2012.

7. T.E.A.C.H Grant • Prepares students to teach in high-need field. • Must teach 4 years at Title I School. • Reverts to loan if requirements of grant are not met. • School determines additional eligibility requirements. • Not all schools participate.

8. Campus-based Programs • Supplemental Educational Opportunity Grant, Work Study, Perkins Loan • Federal government provides a defined amount of money to the college, the college determines the recipients and award amount. • Some colleges choose not to participate in the campus-based aid programs, so when comparing award letters among institutions this point should be noted.

9. Federal Supplemental Education Opportunity Grant (FSEOG) • Students pursuing first bachelor’s or professional degree. • Awarded first to students with exceptional “need”. • Can be awarded to students attending less than full time. • Annual award Maximums: $4,000. Federal Work-Study • Allows student to earn a set amount of dollars for their education. • Eligible employers may be on/off campus (federal, state, or local public agency.) • Student usually awarded funding to work 15-20 hours per week. Studies indicate workload does not negatively impact student’s grades. • Schools must use a portion of funding offered for community service .

10. Federal Perkins Loan • Priority to students who show exceptional need. • Maximum annual loan • $5,500 undergraduate students/$27,500 maximum • Revolving loan fund – amount college has to lend depends upon repayments received – very little capital contribution from the feds each year. • Interest rate: 5% • Nine-month grace period. • Repayment period may be up to 10 years. • Deferment and cancellation provisions available.

11. Federal Loan Programs

12. Federal Stafford Loans • William D. Ford Federal Direct Loan Program (Direct Loan Program) with funds provided directly by the federal government. • College determines loan eligibility and delivers loan proceeds to the student.

13. Federal Stafford Loans (Subsidized and Unsubsidized) • Subsidized Stafford: Must demonstrate need • Cost of Attendance – EFC – other aid • Unsubsidized Stafford: “Need” is not a consideration. • Base annual loan limits (combined subsidized and unsubsidized.) • $3,500 for 1st year undergrad • $4,500 for 2nd year undergrad • $5,500 for each remaining undergraduate year • Students have the option to apply for an additional unsub loan of $2,000 • Undergraduate Aggregate Loan Limits • $31,000 dependent student ($23,000 is subsidized) • $57,500 independent student ($23,000 is subsidized)

14. Additional Unsubsidized Stafford Loan • Additional unsubsidized loan eligibility for independent undergraduates, graduate students, and dependent students whose parents are unable to borrow under the PLUS Loan Program: • $4,000 per year for first and second years of undergraduate study • $5,000 per year for remaining years of undergraduate study

15. Federal Stafford Loan Interest Rates2012 - 2013 Subsidized Loan – 6.8% fixed rate Unsubsidized Loan – 6.8% fixed rate

16. Repayment of Federal Stafford Loans • Six-month grace period. • Maximum repayment period between 10 and 20 years depending on repayment plan chosen.

17. Federal PLUS Loans • Borrowers are parents of dependent undergraduate students or independent graduate students. • Annual loan limit: cost of attendance minus other aid • Interest rate for a Direct PLUS loan is 7.9% fixed rate

18. Federal PLUS Loans • Repayment begins 60 days after loan is fully disbursed if a Parent PLUS loan- i.e. after second semester disbursement • Deferment provisions; only principal is deferred, but interest may be capitalized • Credit check required – if not passed, undergraduate student may be able to borrow additional unsubsidized Stafford loan funds, if Parent PLUS loan.

19. Other Government Resources • Veterans benefits • ROTC scholarships and/or stipends • Bureau of Indian Affairs (BIA) grants • Health and Human Services loan and scholarship programs • State Divisions of Vocational Rehabilitation • State grants, scholarships, loans, and work programs (i.e. SSACI)

20. Other Misc. Sources of Funds • College need-based and non-need based programs: • Academic, athletic, merit, other talent-based scholarships, and need-based grants. • Private/Civic business grants and scholarships. • Scholarships/awards which are not federal, state, or college funded must be reported to the Financial Aid Office at the college so that they may be included in the student’s financial aid package. • Alternative education loans • IRS – federal tax income credits (tax credits offer dollar-for-dollar reduction in tax liability for education expenses (Hope Tax Credit – first and second year up to $1500 per stu; and Lifetime Learning Tax Credit – tax benefit to 20% of tuition expenses up to $10,000.) Students should check with their accountant for all possible tax benefits available to them.

21. Free Application For Federal Student Aid FAFSA 2012 - 2013

22. FAFSA Application Requirements • Submit the Free Application for Federal Student Aid (FAFSA) prior to the college or state deadline, whichever is first (SSACI receipt date deadline to the federal processor on or before 3/10/2012.) • To ensure maximum consideration for federal, state, and college aid, check with each school to determine: • + Required application materials • + Application deadlines

23. Free Application for Federal Student Aid (FAFSA) • Provides a snapshot of the family’s personal and financial information (number in household, number in college, income and assets to determine financial strength.) • Federal Methodology is applied to calculate Expected Family Contribution (EFC). • EFC = Parent Contribution (PC) + Student Contribution (SC) • May file the FAFSA by: • FAFSA on the Web (FOTW) at www.fafsa.govParents and students must get a PIN at www.pin.ed.gov prior to completing FAFSA on the Web. Helps to complete pre-application worksheet as well.

24. To File FAFSA On The Webwww.fafsa.gov(NOT fafsa.com) • FIRST REGISTER FOR A PIN at www.pin.ed.gov The PIN number is available immediately. You may self select a number. You use the PIN number for all federal resources. • If the student is dependent for financial aid purposes: BOTH student and parent must each apply for their own pin number .

25. Financial Aid Packaging

26. Packaging Objectives • Finding the best combination of aid to meet a student’s financial need given limited resources and constraints. • Distribute resources fairly and equitably. • Set realistic self-help expectations. • Offer relevant work experience. • Recruit students* *Although some colleges may use a generous Financial Aid Package to attract/recruit students, many colleges do not package students who have not completed the admission process. Some colleges will provide prospective students an estimate of aid if asked.

27. Considerations in Packaging • Type and amount of funds available • Institutional priorities • Length of academic year • Cost of attendance • Community service • Programs requirements • Student’s year in school • Academic major • Availability of other resources • Debt level of students • Family financial strength • Enrollment for multiple start dates

28. Construction of the Financial Aid Package • Generally speaking, a college will construct a financial aid package in this order: • 1st: gift aid from the federal and state programs for which a student is eligible; • 2nd: college and/or private donor gift aid (can include non-need based aid); and • 3rd: self-help programs (loan and work) are added last. • But, each college will have its own packaging philosophy, subject to aid program regulations and availability of funds

29. No Matter How Good The Financial Aid Package….. • If a “full-ride” package is presented to a student for a college which is not a good personal fit or does not offer the academic programs in which the student is interested, the “economics” at play may lead the student to accept that package and enroll at the college anyway. • An unhappy student is not likely to complete the term and that is time and money that can not be recovered.

30. We Need YOU! • College Goal Sunday will be on Sunday, February 12, 2012! • Volunteer Call Out – CGS is an event held throughout the U.S. to help college-bound students in the financial aid process. Your valued expertise is needed! • If you would like to volunteer: An announcement is forthcoming in the form of an email through CounselorTalk that will indicate where the 40 event sites will be located throughout the state, and how to register to volunteer or you may go directly to the Indiana website at: http://www.collegegoalsunday.org

31. Resources

32. Common Websites/Phone Numbers or Reference Materials Available • 2012-2013 FAFSA on the Web Worksheet (Available in Spanish and in Braille) Order: www.FSAPubs.org or call 1-800-394-7084. Shipping will begin in October • 2012-2013 Free Application for Federal Student Aid (FAFSA) (Available in Spanish or Braille). Order: www.FSAPubs.org or call 1-800-394-7084 • Counselors and Mentors Handbook on Federal Student Aid: A Guide for those advising students about Financial Aid for Postsecondary Education: Available to order NOW! Order: www.FSAPubs.org or call 1-800-394-7084 College Goal Sunday (February 12, 2012):http://www.collegegoalsunday.org