Understanding Financial Aid: Unlocking Opportunities for Higher Education Success

1. “ACCESS TO SUCCESS” FINANCIAL AID WORKSHOPS 2000

2. What is Financial Aid? • Scholarships • Grants • Loans • Employment opportunities 1

3. Two Categories of Aid • Merit-based • Need-based 2

4. PRINCIPLES OF MERIT-BASED AID • Test Scores • Class Rank • Special Skills or Talents • Other Factors

5. PRINCIPLES OF NEED-BASED AID • Provides access to higher education • Provides students a choice about type and location of school they will attend

6. Definition of Need Cost of Attendance (COA) – Expected Family Contribution (EFC) = Financial Need 3

7. Need Varies Based on Cost 4

8. Cost of Attendance • Tuition and fees • Room and board • Books and supplies, equipment, transportation, and miscellaneous personal expenses • Loan fees • Study abroad costs • Dependent or elder care expenses • Expenses associated with a disability • Expenses for cooperative education program 5

9. Principles of Need Analysis • To the extent they are able, parents have primary responsibility to pay for their dependent children’s education • Students also have a responsibility to contribute to their educational costs • Families should be evaluated in their present financial condition • A family’s ability to pay for educational costs must be evaluated in an equitable and consistent manner. 6

10. FACTORS CONSIDERED IN NEED ANALYSIS • Income • Asset Equity (excludes home; other assets ignored if meets certain conditions) • Family size • Age of older parent • Number of children in college

11. TYPES OF NEED-BASED ASSISTANCE • Gift Aid • Grants • Scholarships • Self-Help Aid • Low-interest loans • Part-time student employment

12. PRIMARY SOURCES OF AID • Institutional • Private • State • Federal

13. TITLE IV PROGRAMS • Federal Pell Grants • The campus-based programs: • Federal Perkins Loan • Federal Supplemental Educational Opportunity Grant (FSEOG) • Federal Work-Study (FWS)

14. TITLE IV PROGRAMS (cont.) • Federal Family Education Loan (FFEL) Program: • Federal Stafford Loans (subsidized and unsubsidized) • Federal PLUS Loans • Leveraging Educational Assistance Partnership Program (LEAPP) (formerly SSIG)

15. TITLE IV PROGRAMS (cont.) • William D. Ford Federal Direct Loan Program: • Subsidized Direct Loans • Unsubsidized Direct Loans • Direct PLUS Loans

16. FREE APPLICATION FOR FEDERAL STUDENT AID (FAFSA) • FAFSA is central element in federal student aid application process • Asks for family’s financial and demographic information • Used to calculate EFC based on federal methodology (FM) • Used to confirm student eligibility criteria via database matches w/federal agencies

17. TYPES OF FAFSA’s • Paper • Electronic

18. FAFSA EXPRESS • Stand-alone computer software application tool for use by students to apply for aid directly to U.S.Dept. of Education • Use with any IBM-compatible computer with a modem • Screens resemble a paper FAFSA • Student (and parents) must provide original signatures to complete application process

19. FAFSA EXPRESS (cont.) • Distributed to high school guidance counselors, Educational Opportunity Centers, and financial aid offices

20. FAFSA ON THE WEB • Internet application used by students to complete electronic FAFSA • Must use U.S. version of Netscape Navigator 3.0 or higher • Application information sent directly to CPS • Student must print, sign, and submit signature page to FAFSA processor

21. FAFSA ON THE WEB (cont.) • CPS will print and mail student SAR • http://www.fafsa.ed.gov

22. SUPPLEMENTAL FORMS • Collect additional information used to determine state and/or institutional eligibility • Cannot be required to determine federal student aid eligibility

23. COMMON ERRORS • Providing inaccurate or incomplete data on FAFSA • Not submitting required forms by priority filing deadlines • Not submitting all required application documents

24. SPECIAL INSTRUCTIONS • Students who do not live with parents • Both parents deceased • Students who are separated or divorced • Students who have legal guardians or are wards of the court • Students whose parents are sep. or divorced • Stepparents • One parent deceased

25. DATABASE MATCHES • Social Security match-to verify student’s SSN and claim of U.S.. citizenship • INS match-to verify eligible non-citizen status • Selective Service match-to verify registration with Selective Service

26. DATABASE MATCHES (cont.) • Department of Justice match-to verify that student’s eligibility for Title IV funds has not been suspended or terminated due to drug conviction • NSLDS match-to check for loan defaults or overpayments on Title IV funds

27. STUDENT AID REPORT (SAR) • CPS mails SAR to students who completed a FAFSA • Summarizes information reported on FAFSA • Contains messages related to database matches • Displays official EFC

28. SAR (continued) • Student checks accuracy of information on SAR • If corrections are needed, student makes corrections, signs, and mails SAR back to FAFSA processor or school

29. SAR (continued) • FAFSA processor or school enters corrections and transmits data to CPS which recalculates EFC and sends corrected SAR to student and ISIR to school

30. VERIFICATION • Confirms accuracy of information reported on FAFSA by students and parents • Application selected by CPS or by school • Common documents requested: • 1999 U.S. Income Tax Return, with schedules and attachments • Verification worksheet

31. SPECIAL CIRCUMSTANCES • Student should contact financial aid administrator if there is: • A loss or reduction of family income • A death or illness • Unusual medical or dental expenses not covered by insurance • Other unusual circumstances