What You Need to Know About Financial Aid
Topics We Will Discuss • What is financial aid • Cost of attendance (COA) • The expected family contribution (EFC) • What is financial need • Categories, types, and sources of financial aid • Special circumstances
What Exactly is Financial Aid? Simply put, it is money and other resources that HELP supplement families with postsecondary costs There are four types of basic financial aid
Four Basis Types • Grants – typically awarded based on need as determined by completing the Free Application for Federal Student Aid. Grants DO NOT have to be repaid • Scholarships – typically awarded based on special ability, academic achievements, special interest or other random abilities. Scholarships DO NOT have to repaid, however they come from multiple sources and applications
Four Basic Types continued • Work Study – is part-time jobs both on and off campus. You don’t repay work study funds because you are trading work for this type of financial aid. Eligibility is determined by completing the FAFSA • Educational Loans – are funds borrowed through a financial institution or government to assist with postsecondary costs. These funds DO have to be repaid after the student has stopped attending school.
What is Cost of Attendance (COA) • Direct costs- paid directly to college (tuition/books and at some schools it could be room & board) • Indirect costs – other expenses incurred by the student (transportation, personal and sometimes, rent and food) • Direct and indirect costs combined into cost of attendance • Vary widely from college to college
What is Expected Family Contribution (EFC) ? • Index number calculated using FAFSA data and a federal formula that determines the amount a family should be expected to contribute towards the student’s education. • Index number that is also used to determine eligibility for most financial aid programs.
What is Need? Cost of Attendance (based on the colleges figures) –Expected Family Contribution (from the FAFSA) = Financial Need
Basic Needs Analysis • Examples: 2 Year 4 Year 4 Year Public Public Private Cost $10,500 $24,000 $39,374 EFC $ 3,000 $ 3,000 $ 3,000 Need $ 7,500 $19,000 $36,374 *Colleges try to meet need with Institutional, Federal, and State funds which are made up of scholarships, grants, work and student and parent loans
3 Rules for Paying for College in a Recession • Grades matter more than ever –Surveys show that better grades and test scores receive more scholarship dollars and have access to more college options. • Early birds will get more scholarship worms. The need to complete the FAFSA and all available scholarship applications will insure the first-come, first-serve types of assistance. • Students should apply to at least a couple of affordable schools. Don’t just count on the one “dream” school, be flexible with your options.
Scholarships !!!!! • NOW IS THE TIME • Between now and early spring
Where Can I Get Financial Aid? • Scholarships – You can get scholarships from many sources, but you may have to do detective work to uncover them. • Start here • MOST IMPORTANT: College Financial Aid Offices (start online) • High School Guidance Offices • Business, unions, ethnic or minority organizations, social clubs and community groups
Scholarships – continued • National Scholarship Internet Searches (FREE) • The College Board – http://www.collegeboard.com • FastWeb.com – www.fastweb.com • Scholarship Resource Network Express – www.srnexpress.com • GoCollege.com: The Collegiate Websource – http://www.gocollege.com
Things to Have Available When Applying for Scholarships • Personal Statement/Resume/Essay • Letters of Recommendation • Official High School Transcript
Where Can I Get Financial Aid continued? • Federal Government Largest source of financial aid • Must apply every year using the FAFSA and the last previously ended tax year. Aid awarded primarily on the basis of financial need as determined by the FAFSA
Where Do I Get Financial Aid? cont • Federal Programs cont. Federal Pell Grant Federal Supplemental Educational Opportunity Grant Federal TEACH Grant Federal Work Study Program Federal Educational Loan Programs
Where Do I Get Financial Aid? cont • State Aid • Most states offer grants and scholarships; some offer work study • Eligibility for most state grants is determined by completing the FAFSA and then the information is forwarded to the State for evaluation • You must be a resident of the state
Where Do I Get Financial Aid? cont • Institutional Aid • Many colleges and universities offer their own scholarships and grants. • Programs vary from college to college. • Make sure that you contact the Financial Aid Office or Website at your college to get the additional applications and DEADLINES!!!! • DON’T MISS A DEADLINE, OR YOU MAY MISS FREE MONEY
Types of Federal Loans Available • Federal Perkins Loan is administered by your college. • Government-Sponsored Educational Loan • Subsidized Stafford: Must demonstrate “need” • No payments on principle until 6 months after leaving school • No interest until 6 months after leaving school • The interest is paid by the federal government • Unsubsidized Stafford: Need is not a consideration • No payments on principle until 6 months after leaving school • Interest begins after the loan has been fully disbursed
Federal Stafford Loans • Base annual loan limits (combined subsidized and unsubsidized) • $3,500 for 1st year undergraduates • An additional $2000 of unsubsidized is available for dependent students (ask your financial aid office) • $4,500 for 2nd year undergraduates – Plus the additional $2000 • $5,500 for each remaining undergraduate year • $8,500 for each year of graduate/professional study
Types of Loans continued • Parent Loans – PLUS Loan designed for parents of dependent student to assist with meeting the student need Parent may borrow any dollars needed to meet cost after all student options are exhausted Payment and interest are to begin 60 days after the loan has been fully disbursed, HOWEVER, NEW!!! Parent may apply to have payments deferred until 6 months after the student leaves school. Not automatic, must APPLY
Current Educational Loan Interest Rate Federal Perkins Loan 5% Federal Stafford Unsubsidized 6.8% Federal PLUS Loan range 7.9% to 8.5% Note: The new interest rate for 2012-2013 will be determined July 1st.
Apply for PIN (Personal Identification Number) This is your electronic signature used to sign the FAFSA. NOTE: Each student and ONE parent must have a PIN to sign the FAFSA Go to www.pin.ed.gov Click on “Apply for PIN” Select next, Complete the information request and submit NEW – if you allow the computer to give you a random PIN, your PIN will be REAL TIME and show on the screen when you submit it. IMPORTANT – Print the PIN for your records
Student Financial Aid (SFA) PIN • Web site: www.pin.ed.gov • NEW!!! the PIN numbers can be processed REAL-TIME • Make sure to click “Display Now” when submitting the PIN request. This will give you a REAL TIME PIN to use immediately for the first FAFSA. • May be used by students and parents throughout aid process, including subsequent school years
Student Financial Aid (SFA) PIN • Other uses for PIN • To complete the FAFSA each year • To view the FAFSA during processing • To make corrections to FAFSA • To view Student Loan History for all years
What you will need • Your Social Security Number and your parent’s Social Security Numbers if you are providing parental information • Your driver’s license number • 2011 information from your tax return. NEW: If you have filed your taxes prior to completing the FAFSA, you should check the box to allow the Dept of Ed to pull your income data directly from the IRS. If you have not filed your tax return, go ahead and complete the FAFSA based on your estimated income. • Once you do file your return, you may go back into the FAFSA and make a correction by clicking the button to have the IRS data update your FAFSA or you must call the IRS at 1-800-008-9946 and request a transcript of your 2011 income. Or I have enclosed a request form to mail to the IRS to obtain your Income Tax Transcript known as the 4506T Form. The colleges can NO LONGER accept copies of the student’s or parent’s 1040 form because of the possibility of fraud. • Records of untaxed income for the family • Information on savings, investments and other assets that belong to the family
Parent’s Finances • Although the income from the 2011 income tax return is required to complete the FAFSA, you do not have to wait to complete the FAFSA until you file your taxes. • Estimate your 2011 income based on your last pay stub or your 2010 income tax return, so that you can send the FAFSA in EARLY • Go back and correct once the tax return has been filed as explained on the previous screen. • This will assure you of not missing a college or scholarship DEADLINE
Asset Information Tips • When asked about assets: • Never include your home as an asset, this is a good place to have your excess dollars, because it is not used in the calculation • Never count money set aside for retirement or insurance dollars as an asset, these too are protected • You do, however, count any income that you receive from retirement or insurance dollars. • Count the 529 Educational Plans as assets to the PARENT • Assets of the student is counted at a higher percentage than assets of the parent
What Determines Student Dependency Status? • At least 24 years old by December 31 of award year covered by the FAFSA; • Graduate or professional student; • Married; • Has children or dependents (other than a spouse) for whom the student provides more than half support; • Orphan or ward/dependent of the court; • Veteran of U.S. Armed Forces or currently serving on active duty (for other then training purposes) in the Armed Forces; or • Determined to be “independent” by financial aid administrator based on unusual circumstances • New this past year, 2011-12: Otherwise dependent students may be considered independent if they are homeless or have been emancipated , check with the financial aid office at your college for more information on this.
Parent Definition Clarification 1. If the biological parents are both living & married to each other – their information is included2. If the biological parents are widowed or single, provide the information for that parent.3. If the widowed or single parent is remarried, provide the information about that parent and their current spouse.
4. For shared parenting, give the information for the parent that you lived with the most for the past 12 months or the parent that gave you the most financial support during the last 12 months.NOTE: Grandparents or legal guardians are NOT PARENTS and their information can not be used on the FAFSACheck with your college’s financial aid office to assist with any questions
Recent Regulation Changes • A student can submit a FAFSA to the federal without parental information IF • The parent refuses to provide the information • The student later submits documentation to the Financial Aid Office of the college he/she is attending, to help the FAA to determine if a Dependency Override is warranted • An unsubsidized loan may be disbursed to an otherwise dependent student, on an ISIR without parental information if the FAA determines the necessity. • No EFC will be calculated until the FAA sends in either the parental information or the Dependency Override information.
Steps for the Financial Aid Search • Apply for PIN for student and one household parent. • Collect all information necessary for the FAFSA application. • Use the paper version of the FAFSA on the WEB Worksheet to pencil in the information. • Enter the FAFSA data on line at www.FAFSA.gov and submit when the form is complete DO NOT USE FAFSA.COM, THIS IS NOT THE VALID WEB SITE.
Complete the FAFSA as soon after January 1st as possible • Use estimated 2011 income, if necessary. • IMPORTANT: It is better to submit your FAFSA EARLY with estimated information than to MISS A COLLEGE DEADLINE !!!
Log on to your college(s) web pages to know the appropriate process and deadlines for your institutional scholarships and other college offered aid. • Make sure you do not miss a deadline or you will give up free money. • Wait for the college offers of financial aid to arrive at your home, this happens usually in March. • Accept their offers until you are certain where you are going to attend. • Once you know where you are attending, decline the other college offers.
Customize “My FAFSA” 37 • Start Here for all options – Initial FAFSA Entry • Renewal Application Entry • FAFSA Corrections • Providing Signatures • Continuing a Saved FAFSA • Viewing Transaction Hist0ry
Wait for the College Financial Aid Offers • The college that you listed on the FAFSA will receive the results of your FAFSA within 24 to 48 hours of your submission • The colleges will review the information and start the process of evaluating the student’s NEED • Usually you will begin to receive your Financial Aid offers known as the Award Letter beginning in March
Special Education Tax Benefits • Hope Tax Credit Some first and second year student families may qualify for a special tax credit. Keep track of your out-of-pocket expenses including loan dollars paid for qualified tuition expenses
Tax Benefits continued • Student Loan Interest Deduction • Parents and students who paid interest on qualified educational loans and who meet the income qualifications may be able to use this deduction. The maximum deduction each taxpayer is permitted to take is $2,500
Dislocated Worker • If one of the wage earners in the household is currently unemployed and eligible for Unemployment, complete the FAFSA with the actual 2011 income first. • Then make an appointment with your College’s Financial Aid Office to be considered for an appeal. • Most financial aid offices will then allow the family to only include income to be earned in 2012 without counting the unemployment or severance as pay. • This will increase the amount of free aid to the student.
Changes in Circumstances • Notify your Official Financial Aid Office of any changes to income, household size, marital status change prior to beginning the Fall Term. • Changes in employment status • Medical expenses not covered by insurance • Change in parent marital status • Unusual dependent care expenses
Special Circumstances • Cannot report on FAFSA • Send explanation to financial aid office at each college • College will review special circumstances • Request additional documentation • Decisions are final and cannot be appealed to U.S. Department of Education
College Goal Sunday • Sunday, February 12, 2012, 2 p.m. • Central Campus Hillsboro • Student should register at: • www.ohiocollegegoalsunday.org or • By calling 1-877-428-8246