Understanding Financial Aid: Information Session Presented by Triena Bodart, UW-Milwaukee

1. Understanding Financial Aid:Information Session Presented by Triena Bodart, UW-Milwaukee

2. Financing Your Education • Goal of financial aid • How to apply • Determining eligibility • Types of aid available

3. Goal of Financial Aid • To assist students in paying for college. • To provide opportunity and access to higher education. Helps “bridge” the gap between what the family can pay and the cost of education.

4. Paying for College is a… …Shared Responsibility • Students and Parents • State and Federal Governments • Private Sources

5. Financial Aid Regulations • Are determined by federal and state statutes and legislators • Establish your eligibility for most types of aid • Apply to all schools

6. You may be eligible for aid, but….. YOU MUST APPLY TO FIND OUT! And it’s free! www.FAFSA.gov

7. Completing the FAFSA ♦The earliest you may file the FAFSA is January 1 of the year you graduate high school ♦ Check with the colleges where you plan to apply for deadlines and institutional requirements. ♦ The FAFSA is student specific. ♦ It is o.k. to estimate income ♦ Who is considered a parent? ♦ You must re-apply for aid every year.

8. What IS a PIN?www.pin.ed.gov • Personal Identification Number • Electronic Signature • Students and parents must get PINs • PIN delivered immediately • Can also be used for: • Renewal on the Web • Corrections on the Web • National Student Loan Database • Signing promissory notes for student/parent loans

9. Applying Online is so Easy: • Complete and send FAFSA on the internet directly to federal processor • Automatically edits data as you enter it and detects errors before submission • Skip logic: asks only what you must answer • English or Spanish versions • Electronic Signature • E-mail notification of results • Detailed online help screens • Real-time online chat for immediate answers • Instant access to EFC estimate • Parents with more than one child in college only need to enter parental information once.

10. Get Help College Goal Sunday • Free program to help families complete the FAFSA • February 20-21, 2010 • Scholarship drawing at each site • 25 sites throughout Wisconsin www.wicollegegoalsunday.org (866)-578-GOAL SHOW UP. CASH IN.

11. Proceed with Caution! • Never pay a fee to file the FAFSA • When filing a FAFSA, make sure you go directly to: www.fafsa.gov (not www.fafsa.com) • Contact the financial aid office if you need help in completing the FAFSA • Never pay for financial aid assistance! • Financial aid nights • Campus tours • Scholarship searches

12. Expected Family Contribution (EFC)(Federal Methodology established by U.S. Congress) Determined by filing the FAFSA www.FAFSA.gov

13. Main Determinants of the EFC • Income • Assets • Family size • Number in College • Age of the older parent Adjustments to EFC may be made due to Verification and/or Special Circumstances that limit ability to pay

14. Expected Family Contribution (EFC) Is the sum of four separate calculations: Contribution from Parental Income Contribution from Parental Assets Contribution from Student Income Contribution from Student Assets

15. Assets and the FAFSA • Assets Included • Cash, Savings & Checking Accounts • Rental Real Estate equity • Value of Business land, buildings, equipment, inventory, etc. for companies with 100 or more employees. • Trust Funds, Mutual Funds • CD’s, Money Market Funds • Stocks, Bonds • Education IRA’s • College Savings Plans (529’s) • Value of prepaid college tuition plans Assets Not Included • Home in which you live • Family farm which you live on and operate • Value of Business land, buildings, equipment, inventory, etc. for companies with under 100 employees. • Value of life insurance and retirement plans (pensions, annuities, Keogh’s non-education IRA funds, etc.)

16. Dependency Status • At least 24 years old; • Graduate or professional student; • Married; • Has child for whom student provides more than half support; • Has dependent other than child or spouse who lives with student and for whom provides more than half support; • Orphan; • In foster care or a ward of the court, at any time when the individual is 13 years of age or older; • Is an emancipated minor or is in legal guardianship; • Has been verified as an unaccompanied youth who is homeless or at risk of homelessness and is self-supporting; • Veteran of the U.S. Armed Forces or currently serving active duty for other than training purposes in the U.S. Armed forces; or • Determined to be independent by the financial aid administrator via Professional Judgement (Parents refusal to provide support or financial data is insufficient to make a student independent regardless of tax filing status)

17. Frequent FAFSA Errors • Missing Signatures/PIN • Wrong Social Security Number • Divorced/remarried parent information • Untaxed income • U.S. income taxes paid • Household size • Number in postsecondary education • Not using real name • NOT APPLYING AT ALL

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

19. What Are the Costs? (Direct & Indirect) Tuition and Fees + Room and Board + Transportation + Books & Supplies + Miscellaneous Personal Expenses = Cost of Attendance (COA)

20. Financial Need Varies by School

21. Special Circumstances? Call the Financial Aid Office • Divorce/Separation after filing the FAFSA • Loss of income or benefits • One-time income • Death or Disability of parent/disability of student • Medical/Dental expenses not covered by insurance • Elementary or secondary school tuition • Dependency override

22. Timelines • The earliest a student can file the FAFSA for the 2010-2011 academic year - January 1, 2010 • Check with the colleges at which the student plans to apply for institutional deadlines and requirements. • Failure to apply early may result in less aid even if eligible. • Students must re-apply for aid every year.

23. After you file the FAFSA • Results are sent electronically to the college(s) the student selected. • Students may be required to verify the information submitted on the FAFSA (submit tax forms). • Contact the college with any Special Circumstances. • After the student is admitted to a college, a financial aid package will be prepared.

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

25. Three primary sources of Funding: • US Department of Education • the federal agency that provides college funding in the form of grants, scholarships, work study, and loans • State • most states have agencies that administer state scholarship and grant programs, college savings and prepaid tuition programs, and loans. (In WI it is HEAB, the Higher Educational Aids Board.) • Colleges & Universities • schools may offer their own scholarship, grant, work-study and loan programs, with each college setting its requirements

26. Gift Aid (FREE $$$) Grants & Scholarships • Federal (Administered by schools) • Federal Pell Grant • Federal SEOG • Academic Competitiveness Grant (ACG) • National SMART Grant • TEACH Grant • State (Administered by HEAB, DPI-WEOP & Schools) • Institutional (Endowment funds from Schools) • Private (Various outside organizations)

27. Need versus Merit Aid • Aid based on financial need • Most government grants • Subsidized student loans • Federal Work-Study • Aid based on merit • Academic and athletic scholarships • Some government grants • Some scholarships require merit and need

28. Avoid Being Scammed • For information about financial aid scams and tips to avoid being scammed check: • Department of Education’s web site at: http://studentaid.ed.gov/students/publications/lsa/index.html • Federal Trade Commission’s web site at: www.ftc.gov/bcp/conline/publs/alerts/ouchart.htm • To check the legitimacy of scholarship search organizations or individuals check Better Business Bureau’s web site at: http://www.bbb.com/

29. Self-Help Aid Loans (must be repaid with interest) • Federal Stafford Loan • Federal Perkins Loans • Federal PLUS (Parents or Grad students) • State or Institutional Loans • Private-Educational Loans Employment (must be earned as wages) • Federal work study • Institutional work-study programs

30. FEDERAL STAFFORD LOAN Two types of Stafford Loans: • Subsidized - no interest accrues while in school or in deferment; Student who has remaining need; (Interest rate of 4.5% for 2010-2011, 3.4% 2011-2012) • Unsubsidized - interest begins immediately, although repayment is not required immediately: Student has no remaining need; interest rate of 6.8%

31. Stafford Loan Limits • Freshman $5,500 • Sophomore $6,500 • Junior $7,500 • Senior $7,500 • 5th Year & beyond $7,500 • Cumulative maximum for dependent undergraduate is $31,000, with no more than $23,000 in subsidized loans.

32. Tips for Borrowing - Borrow conservatively! Remember: Loans have to be paid back- Keep detailed records- Borrow only what is needed for direct educational expenses - Utilize Tax Benefits like Interest Deductibility & the American Opportunity Tax Credit and/or Lifetime Learning Credit

33. Federal Student Loans Every family should file a FAFSA. Regardless of income, every student qualifies for a Federal Stafford loan, if they meet the basic eligibility requirements. Benefits of a federal student loan: • You don’t have to repay until you leave school • Lower interest rates than private loans or credit cards • Credit record is not needed • Co-signer is not required

34. Other Financing Options - Parent PLUS (Parent Loan for Undergraduate Student)- Private Educational Loans - Monthly Payment Plans- Home Equity Loans

35. Other Sources of Funds Parental Affiliations • Employers & Labor Unions • Religious and Community Organizations • Clubs and Civic groups Civic organization scholarships • High School • Local Public Library Private business scholarships

36. Government Resources • Corporation for National and Community Service • Veteran’s benefits • ROTC Scholarships and/or stipends • Bureau of Indian Affairs (BIA) Grants • State Divisions of Vocational Rehabilitation (DVR) • Health and Human Services Loan and Scholarship Programs

37. How to Compare College Financial Aid Offers • Start with tuition, fees, room and board • Subtract grant and scholarship offers only • The difference is your “net cost” • Always compare net cost • Do not subtract Federal Work Study as a lump sum disbursement

38. FAFSA4caster • FAFSA4caster will: • Automatically generate a Federal Student Aid PIN for use when signing the FAFSA • Instantly calculate eligibility for federal student aid • Generate a FAFSA –a FAFSA populated withstudent FAFSA4casterdata will be availablewhen the student isready to file the officialFAFSA

39. Questions?Thank you for attending!

40. Helpful Websites to Remember: • www.PIN.ed.gov • www.FAFSA.ed.gov • www.wicollegegoalsunday.org • www.studentaid.ed.gov • www.fafsa4caster.ed.gov • www.KnowHowToGo.org • www.Going2College.org