What You Need to Know About Financial Aid

1. What You Need to Know About Financial Aid

2. Financial Aid Financial aid consists of funds provided to students and families to help pay for postsecondary educational expenses.

3. Cost of Attendance (COA) Direct Cost + Indirect Cost = COA • Direct costs • Fees a school bills directly to the student (tuition, fees, room & board) • Indirect costs • Fees that students may incur to go to school but not billed directly from the college (transportation to get to college; personal expenses such as shampoo, hairspray, deodorant; room and board if not living on campus) • COA varies widely from college to college

4. Expected Family Contribution (EFC) • An index used to calculate eligibility for aid • Stays the same regardless of college • Two components –Parent contribution –Student contribution • Calculated using FAFSA data and a formula specified in law

5. Financial Need Cost of Attendance (COA) – Expected Family Contribution (EFC) = Financial Need

6. Categories of Aid • Need-based aid • Non need-based aid

7. Types of Aid • Gift Aid • Scholarships • Money that does not have to be paid back • Awarded on basis of merit, skill, or unique characteristic • Grants • Money thatdoes not have to be paid back • Usually awarded on the basis of financial need

8. Types of Aid (cont’d) • Self-Help Aid • Loans • Money students and parents borrow to help pay college expenses • Repayment usually begins after education is finished • Only borrow what is really needed • Look at loans as an investment in the future

9. Types of Aid (cont’d) • Self-Help • Employment (work-study) • Allows student to earn money to help pay educational costs: • A paycheck; or • Nonmonetary compensation, such as room and board

10. Sources of Aid • Federal government • States • Colleges • Private sources

11. Federal Financial Aid Programs: Grants • Federal Pell Grant • Teacher Education Assistance for College and Higher Education (TEACH) Grant • Federal Supplemental Educational Opportunity Grant (FSEOG) • Iraq and Afghanistan Service Grant

12. Federal Pell Grant The Federal Pell Grant Program provides need-based grants to low-income undergraduate students. Grant amounts depend on the student’s: • Expected Family Contribution (EFC) • Enrollment status (full or part-time) • Attendance status (full academic year or less) • Pell Grant maximum award per academic year: $5,645 (2013-2014) * Maximum award may be subject to change pending legislative budgetary adjustments

13. FSEOG The Federal Supplemental Educational Opportunity Grant (FSEOG) Program provides need-based grants to low-income undergraduate students (campus-based aid). Grant recipients must be: • Pell Grant-eligible • Current award amounts are from $100 - $4,000 • Not all colleges participate in the FSEOG program and funds depend on availability at the college

14. TEACH Grant The Teacher Education Assistance for College and Higher Education Grant Program (TEACH) provides assistance to students who intend to teach in a public or private elementary or secondary school that serves students from low-income families. Grant recipients must be: • Enrolled in an institution that participates in the TEACH Grant Program • Enrolled in coursework that is necessary to begin a career in teaching • Able to demonstrate certain academic achievements

15. TEACH Grant (cont’d) The Teach Grant: • Is not based on financial need • Is available to both undergraduate and graduate students • Provides the following maximum award $4,000 (2013-2014) TEACH Grant recipients must sign an ‘Agreement to Serve’ which states that the student will: • Teach at least four years in a public or private elementary or secondary school • Teach full-time in a high-need field • Teach in a school that serves students from low-income families • If the teaching obligation is not completed, the TEACH Grant must be repaid as a Direct Unsubsidized Stafford Loan

16. Iraq/Afghanistan Service Grant Students whose parent or guardian died as a result of military service in Iraq or Afghanistan after September 11, 2001, may be eligible for additional Title IV aid. Additional Student Eligibility Requirements: • Less than 24 years old • Enrolled in college at least part-time at the time of the parent’s or guardian’s death

17. Federal Aid Programs -Self-Help Aid • Federal Work-Study • Federal Perkins Loan • Direct Stafford Subsidized • Direct Stafford Unsubsidized • Direct PLUS (Parent) • Direct PLUS (Graduate/Professional)

18. Federal Work-Study Provides part-time jobs for undergraduate and graduate students with financial need, allowing them to earn money to help pay education expenses (campus-based) • Eligible employers (On-campus or off-campus employment) • Schools • Federal, state or local public agency • Private nonprofit organization • Community service activities • Students are paid at least federal minimum wage • Not all colleges participate in the Federal Work-study program and funding depends on availability at the college

19. Federal Perkins Loan • Your college is the lender • Payment is owed to the college that made the loan • Interest charged on this loan is 5% • Funds depend on financial need and availability at the college • Not all colleges participate in the Federal Perkins Loan program • Undergraduate students – up to $5,500 a year • Graduate and professional degree students – up to $8,000

20. Direct Stafford Loans (for undergraduate) Subsidized Loans • Government PAYS the borrowers accrued interest while you are attending college and other eligible periods • Based on Financial Need • Fixed Rate • Undergraduate students • Amount: $3,500-$5,500 • New borrowers reaching 150 percent of the published length of borrower’s educational program become ineligible for interest subsidy benefits on all Direct Subsidized loans first disbursed to that borrower on or after 7/1/13

21. Direct Stafford Loans (for undergraduate) (cont’d) Unsubsidized Loans • The borrowers is responsible for the interest for the life of the loan • NOT Based on Financial Need • Fixed Rate • Undergraduate and graduate students qualify • Amount: $5,500-$12,500

22. Direct PLUS Loan (parent) PLUS loans originate through the William D. Ford Federal Direct Loan Program (Direct Loans). Loan characteristics: • For parents of dependent students; parent is the borrower and loan cannot be transferred into student’s name • Borrowers may receive loan amounts up to, but not exceeding the college’s ‘Cost of Attendance’ • Borrower is responsible for all the interest • Borrower must not have a negative credit history

23. Federal Loan Programs

24. Other Federal Aid Programs • Corporation for National and Community Service • U.S. Department of Veterans Affairs • Reserve Officers Training Corps (ROTC) • Bureau of Indian Affairs (BIA) Grants • Vocational rehabilitation benefits • U.S. Department of Health and Human Services (HHS)

25. State – South Dakota Opportunity http://sdos.sdbor.edu/ • Being designated as a Regents Scholar does not automatically qualify the student for the South Dakota Opportunity Scholarship (SDOS). • Reminder – To establish initial eligibility, the student must complete an application form (now available in electronic format) and submit this to the college he or she will attend. • Due Date: Complete application packages are due to institutional representatives by no later than September 1st for those seeking initial enrollment during the Fall term, and no later than January 15th for those seeking initial enrollment during the Spring term.  However, it is recommended that the initial scholarship application and transcript be submitted by June 1st when establishing eligibility for the Fall term and November 1st for the Spring term so that the financial aid office can begin to work with eligible students to package a scholarship award in a more timely manner.

26. South Dakota Opportunity (cont’d) The South Dakota Legislature established requirements: • Be a resident of South Dakota at time of high school graduation. • Have an ACT composite score of 24 or higher before the beginning of post-secondary education. If using a SAT score, the sum of the verbal and mathematics scores on the SAT must be at least 1090. • Complete high school course requirements with no final grade below a "C" (2.0 on a 4.0 scale) and a cumulative high school GPA of 3.0 on a 4.0 scale (grade of "B") prior to graduation (Note: One unit of high school credit equals 1 year of instruction). • Effective for those students entering into postsecondary education for the first time on or after August 2013, the curriculum requirements specified in section 3 above are not required for any student who has received a composite score on the ACT of at least 28 and meets the ACT college readiness benchmarks scores equaling or exceeding 18 for English, 21 for Reading, 22 for Math, and 24 for Science.

27. South Dakota Opportunity (cont’d) • Attend a university, college, or technical school accredited by the Higher Learning Commission of the North Central Association of Colleges and Schools and that provides instruction from a campus located in South Dakota. • Enter into the program within 5 years of high school graduation, or within 1 year of the student's release from active duty military service (if that release is within 5 years of the date of the student's high school graduation). Students seeking to transfer from a regionally accredited university, college, or technical school located outside of South Dakota may do so within two years following high school graduation and be eligible to receive partial award.

28. State: Dakota Corps http://www.state.sd.us/dakotacorps/default.html • Graduate from an accredited South Dakota high school with a Grade Point Average (GPA) of 2.8 or greater on a 4.0 scale.  • Have a composite ACT score of 24 or greater (or the SAT equivalent). • Agree, in writing, to stay in South Dakota and work in a critical need occupation after graduation for as many years as the scholarship was received, plus one year (see website on critical needs).

29. State: Dakota Corps (cont’d) • Apply for the Dakota Corps Scholarship for a school period that begins within one year of high school graduation, or within one year of release from active duty of an active component of the armed forces.   • Attend a participating South Dakota college as an undergraduate student in a program that will prepare the student to work in a critical need occupation. Note: not all South Dakota colleges participate. See website for participating colleges. • Be a U.S. citizen or U.S. national. Deadline: applications must be postmarked by February 1st

30. State: Jump Start Scholarship http://www.sdbor.edu/students/JumpStart.htm During the 2011 Session, the Legislature approved the creation of the Jump Start Scholarship program which is designed to provide a student who graduates from a public high school in three years or less to receive a scholarship funded with a portion of the money saved by the state in state aid to education funding pursuant to chapter 13-13.  As a result of the student's early graduation, if the student enrolls at any college, university, or technical school accredited by the North Central Association of Colleges and Schools that provides instruction from a campus located in South Dakota, for the 2013-14 academic year the student will be eligible for $1,866.45 to be distributed equally across both the Fall and Spring semesters during their first year of post-secondary enrollment.  No student who enrolls in a high school for all or any part of a fourth year is eligible for the Jump Start Scholarship program.   

31. Jump Start (cont’d) To be eligible for the Jump Start Scholarship program, a student shall: • Be a resident of South Dakota; • Complete the requirements of the recommended high school program as established by the Board of Education pursuant to §13-1-12.1, and be awarded a high school diploma by a public high school in three years or less; • Have attended a public high school in South Dakota on a full-time basis for at least two semesters prior to graduating; and • Within one year of graduating from high school, excluding any time served on active duty in the armed forces of the United States, enroll in a college, university, or technical school accredited by the North Central Association of Colleges and Schools that provides instruction from a campus located in South Dakota Application form should be submitted as soon as possible, but no later than September 1, to the admissions office of the university, college, or technical school the applicant plans to attend

32. State: South Dakota Need Based Grant Program Legislative action this year has brought South Dakota in line with other states who offer need-based financial aid to students pursuing postsecondary education. The South Dakota Needs Based Grant Program (SDNBGP) was established with the passage of Senate Bill 237 (see attachment I). Interest earned from a one-time investment of $1.5 million in state monies will be used to fund the grant program, but in order to provide for funding during the FY14 academic year, the legislature included an emergency clause that included $200,000 in immediate funding. These funds will be distributed to needy students enrolled at participating institutions located in South Dakota.

33. South Dakota Need Based Grant Program (cont’d) General eligibility requirements indicate that a student must: • Be a legal resident of South Dakota; • Be enrolled at least part-time in an eligible program at an eligible school; • Have a high school diploma or its recognized equivalent (or be beyond the age of compulsory school attendance in the state where the school is located and have passed an independently administered test approved by the Department); • Be maintaining satisfactory academic progress standards in his/her other course of study; • Annually submit the Free Application for Federal Student Aid;

34. South Dakota Education Access Foundation (SDEAF) Foundation • Private nonprofit foundation • Created when Education Assistance Corporation affiliated with Great Lakes Higher Ed Corporation • http://www.sdeducationaccess.org/ Mission • To expand access to postsecondary education Programs • Grants to Postsecondary Students • College Access Advising

35. SDEAF (cont’d) Grants to Postsecondary Students • $1.8 million distributed to South Dakota institutions for 2013-14 academic year • Institutions award grants  based on need and other criteria established by each institution • Visit the SDEAF website for a list of participating schools. http://www.sdeducationaccess.org/

36. Private Sources • Foundations, businesses, charitable organizations • Deadlines and application procedures vary widely • Begin researching private aid sources early

37. Civic Organizations and Churches • Research what is available in community • To what organizations and churches do student and family belong? • Application process usually occurs during spring of senior year • Small scholarships add up!

38. Employers • Companies may have scholarships available to the children of employees • Companies may have educational benefits for their employees • Employer-sponsored tuition plans

39. Other Sources of Aid • Other family resources • Home equity loans • Private/alternative loans • Tuition savings plans (529 plans)

40. Applying for Federal Student Aid

41. FAFSA • Produced by the U.S. Department of Education • Collects family’s personal and financial information used to calculate student’s EFC • Amount of money a student and his or her family may reasonably be expected to contribute towards the cost of the student’s education for an academic year • Available in English and Spanish • Available in three formats: • On-line (www.fafsa.gov) • PDF (Download from www.fafsa.gov) • Paper

43. FAFSA • May be filed at any time during an academic year, but no earlier than the January 1st prior to the academic year for which the student requests aid • For the 2014–15 academic year, the FAFSA may be filed beginning January 1, 2014 • Most colleges set FAFSA priority filing deadlines

44. FAFSA on the Web (FOTW) Good reasons to file electronically: • Built-in edits to help prevent costly errors • Simplification: Skip-logic allows student and/or parent to skip unnecessary questions • Option to use Internal Revenue Service (IRS) Data Retrieval Tool to import tax data • Immediate submission of original application and any necessary corrections • More detailed instructions than space allows on the paper FAFSA • Help & Live Chat Assistance Options • Ability to check application status on-line • Simplified application process in subsequent years

45. IRS Data Retrieval Tool • While completing FOTW, applicant may submit real-time request to IRS for tax data • IRS data available within 2-3 weeks for electronic filers or 8-11 weeks for paper tax filers • IRS will authenticate taxpayer’s identity • If match found, IRS sends real-time results to applicant in new browser window • Applicant chooses whether or not to transfer data to FOTW • Available early February 2014 for 2014–15 processing cycle • Participation is voluntary • Reduces documents requested by financial aid office

46. IRS Data Retrieval Tool (cont’d) • Some will be unable to use IRS DRT • Examples include: • Filed an amended tax return • No SSN was entered • Student or parent married but filed separately • Unmarried and both parents living together

47. PIN Registration • Website: www.pin.ed.gov • Sign FAFSA electronically • Not required, but speeds processing • May be used by students and parents throughout aid process, including subsequent school years

48. FAFSA on the Web Worksheet • Helpful tool that includes questions that may be applicable to all students • Smart Logic means all students will not see same number and sets of questions on FOTW • Available in English & Spanish • Has four sections • Student General Info • Dependency Status Questions • Parental Information(Including financial) • Student Information(Including financial) • Additional Information: College and Housing info

49. Frequent FAFSA Errors • Social Security Numbers • Divorced/remarried parental information • Income earned by parents/stepparents • Untaxed income • U.S. income taxes paid • Household size • Number of household members in college • Real estate and investment net worth

50. FAFSA Processing Results • CPS notifies student of FAFSA processing results by: • E-mail notification containing a direct link to student’s electronic SAR if student’s e-mail was provided on paper or electronic FAFSA • Student with FSA PIN can view SAR online at www.fafsa.gov