Transcript What You Need to Know About Financial Aid

National Association of Student
Financial Aid Administrators
What You
Need to Know
About Financial Aid
© NASFAA 2008
Who Is Responsible To Pay?
• You (student)
• Your parents
– Colleges, universities, state and federal
agencies all view you and your parents as the
first source of funds for college
• Government sources
• Institutional aid
Slide 2 © NASFAA 2008
Financial Aid Lingo
• Cost of Attendance
• Expected Family Contribution
• Demonstrated Need
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What is Cost of Attendance (COA)
• Direct costs (tuition, fees, room and board)
• Indirect costs (books, travel and personal expenses)
• Direct and indirect costs combined into
cost of attendance
• Vary widely from college to college
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What is the Expected Family
Contribution (EFC)
• Amount family can reasonably be expected
to contribute
• Stays the same regardless of college
• Two components
– Parent contribution
– Student contribution
• Calculated using FAFSA data and a federal
formula (Income, assets, family size, number in college, etc…)
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What is Financial Need
Cost of Attendance
–
Expected Family Contribution
=
Demonstrated Financial Need
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Demonstrated Need
College A
• COA
• EFC
• Need
$35,000
- $20,000
= $15,000
College B
• COA
• EFC
• Need
$25,000
- $20,000
= $ 5,000
College C
• COA
• EFC
• Need
$15,000
- $20,000
= $0
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Categories of Financial Aid
• Need-based
• Non need-based or merit
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Types of Financial Aid
• Gift Aid
– Scholarships
– Grants
• Self Help Aid
– Loans
– Employment
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Sources of Financial Aid
• Federal government
– http://studentaid.ed.gov/
• State government
– http://www.in.gov/ssaci/
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Colleges & Universities
Private sources
Civic organizations and churches
Employers
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Federal Government
• Largest source of financial aid
• Aid awarded primarily on the basis of
financial need
• Must apply every year using the FAFSA
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Common Federal Aid Programs
• Federal Pell Grant
• Academic
Competitiveness Grant
and National Science and
Mathematics Access to
Retain Talent Grant
• Teacher Education
Assistance for College
and Higher Education
Grant
• Federal Supplemental
Educational Opportunity
Grant
• Federal Perkins Loan
• Federal Work-Study
• Stafford Loans
– Subsidized or unsubsidized
• PLUS Loans
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States
• Residency & college attendance requirements
• Award aid on the basis of both merit and need
• Use information from the FAFSA
• www.ssaci.in.gov/estudent
• Deadlines vary by state
– Indiana - March 10
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College or University
• Programs vary
• Attempt to meet Need (FAFSA)
– Federal, State, then institutional
• Academic Scholarships
– GPA and SAT/ACT scores
• Merit Scholarships (athletic, music, etc…)
• Special grants and scholarships
• Work Study (gov’t or institutional)
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Private Sources
• Foundations, businesses, charitable
organizations
• Deadlines and application procedures
vary widely
• Begin researching private aid sources
early
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Civic Organizations and Churches
• Research what is available in community
• To what organizations and churches does
student and family belong?
• Application process usually begins fall of
senior year
• Small scholarships add up!
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Employers
• Companies may have scholarships
available to the children of employees
• Companies may have educational
benefits for their employees
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Free Application for Federal Student Aid
(FAFSA)
• A standard form that collects demographic
and financial information about the student
and family
• Should be filed electronically
• Available in English and Spanish
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FAFSA
• Information used to calculate the Expected
Family Contribution or EFC
– The 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
• Colleges use EFC to award financial aid
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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 2011-12 academic year, the FAFSA
may be filed beginning January 1, 2011
• Colleges may set FAFSA filing deadlines
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FAFSA on the Web
• Web site: www.fafsa.ed.gov
• 2011-12 FAFSA on the Web available on January
1, 2011
• FAFSA on the Web Worksheet:
– Used as “pre-application” worksheet
– Questions follow order of FAFSA on the Web
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FAFSA on the Web
Good reasons to file electronically:
• Built-in edits to prevent costly errors
• Skip-logic allows student and/or parent to skip
unnecessary questions
• More timely submission of original application and any
necessary corrections
• More detailed instructions and “help” for common
questions
• Ability to check application status on-line
• Simplified renewal application process
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Student Financial Aid (SFA) PIN
• Web site:
www.pin.ed.gov
• Sign FAFSA
electronically
• Can request PIN before
January 1, 2011
• May be used by students
and parents throughout
aid process, including
subsequent school years
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Signatures
• Required
– Student
– One parent (dependent students)
• Format
– Electronic using PIN
– Signature page
– Paper FAFSA
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Frequent FAFSA Errors
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Social Security Numbers – Name / birth date
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
Male students – 18 yrs. – Selective Service
– www.sss.gov
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FAFSA Processing Results
Central Processing System (CPS) notifies
student of FAFSA processing results by:
• Paper Student Aid Report (SAR) if paper
FAFSA was filed and student’s e-mail
address was not provided
• SAR Acknowledgement if filed FAFSA on
the Web and student’s e-mail address was
not provided
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FAFSA Processing Results
• CPS notifies student of FAFSA processing
results (EFC) by:
– E-mail notification containing a direct link to
student’s on-line SAR if student’s e-mail was
provided on paper or electronic FAFSA
• Student with PIN may view SAR on-line at
www.fafsa.ed.gov
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FAFSA Processing Results
• Institutional Student Information Record
(ISIR) sent to colleges listed on FAFSA
approximately 10 to 14 days after FAFSA
submitted
• College reviews ISIR
– May request additional documentation, such
as copies of federal tax returns
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Student Aid Report
• Issued by college
• Review data for accuracy
• Update estimated information when
actual figures are available
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Making Corrections
If necessary, corrections to FAFSA data may
be made by:
• Using FAFSA on the Web ( www.fafsa.ed.gov ) if
student has a PIN;
• Updating paper SAR (SAR Information
Acknowledgement cannot be used to make
corrections); or
• Submitting documentation to college’s
financial aid office
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Special Circumstances
• Cannot report on FAFSA
• Send explanation to financial aid office at each
college
• College will review special circumstances
– Professional Judgment
– Request additional documentation
– Decisions are final and cannot be appealed to U.S.
Department of Education
Slide 37 © NASFAA 2008
Special Circumstances
• Change in employment status
• Medical expenses not covered by insurance
• Change in parent marital status
• Unusual dependent care expenses
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Family Profile
Oldest Parent’s Age: 50
Family Members: 4
Number in College: 1
Federal tax: 10% of AGI
The Parent Contribution
A Case Study
If Parents' Assets are:
$15,000 $50,000 $70,000 $100,000
Parents' AGI
Expected Parent Contribution will be:
$40,000
$1,115
$1,150
$1,678
$2,470
$60,000
$4,968
$5,021
$5,837
$7,252
$80,000
$11,710
$11,818
$12,911
$14,603
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2007-2008 Federal Methodology
23
The Financial Aid Barrel
A Sample Financial Aid Award
COA
$25,000
-
EFC = Need
8,000 = 17,000
Unmet Need = $1,900
Work = $1,500 Work Study
Loan = $2,600 Stafford Loan
Gift Aid = $6,000 Grant +
$5,000 Scholarship
EFC = $8,000
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Net Cost Concept
College A
• COA
$35,000
• Total Aid - $20,000
• Net Cost = $15,000
College B
• COA
$25,000
• Total Aid - $ 9,000
• Net Cost = $16,000
What will I actually end up paying?
Consider more than just the price tag.
Slide 41 © NASFAA 2008
Resources for Locating Financial Aid
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High school counselors
College admissions and financial aid staff
College websites
Military: ROTC
Local organizations, foundations,
employers, libraries, etc.
• Scholarship databases
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Financial Aid Tips
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Comply with deadlines
Apply early if possible
Be specific in describing special circumstances
Document dates and times forms were submitted
Financial Aid awards may vary significantly
amongst colleges, particularly private institutions
• Feel free to ask questions and maintain contact
with Student Financial Services
Slide 43 © NASFAA 2008
College Cost Cutters
• Advanced Placement courses
• Credit by exam
– College Level Examination Program (CLEP)
– Institutional exams
• Accelerated degree programs
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Remember
• Don’t initially eliminate any school because
of sticker price
• Any amount saved may result in additional
options for paying for college
• Think of college more in terms of long-term
investment rather than short-term cost
Slide 45 © NASFAA 2008
Other sources of income
• Federal Tax Credits
– Hope tax credit
– Lifetime Learning tax credit
• 529 College Savings Accounts
– http://www.savingforcollege.com/529_plan_details/
Slide 46 © NASFAA 2008
College Goal Sunday
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February 20, 2011
IPFW
2 – 4 p.m.
http: www.collegegoalsunday.org
Slide 47 © NASFAA 2008
SportsWorx
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College recruiting service
Not just for athletes
www.sportsworx.com/
Rodney Sinn
– [email protected]
Slide 48 © NASFAA 2008
Final Thoughts
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Begin with the end in mind
Begin early
Be aggressive
Prayerfully consider where God wants your
student to attend. Do not choose a school
just because it has the best $ deal.
• Consult your friends who have gone before
and trusted advisors
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