Financial Aid 101

Whitehouse High School October, 2014

The Value of a College Education According to the US Bureau of Labor Statistics in 2010, average yearly earnings are higher for college graduates • • • High school diploma $32,552 Bachelor’s degree $53,976 Advanced degrees $70,252

Goals of Financial Aid - Affordability • Financial aid is funds provided to students and families to help pay for postsecondary educational expenses • • • To provide Access -- regardless of income To provide Choice -- regardless of cost To Recruit -- desirable students Consider Net Cost not Sticker Price

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, recognizing that special circumstances can and do affect its ability to pay

What is Cost of Attendance (COA) • Direct costs • Indirect costs • Direct and indirect costs combined into cost of attendance • Varies widely from college to college

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

Financial Aid Formula

Cost of Attendance - Expected Family Contribution = Financial Need

Need Varies Based on Cost

2 3

COA (variable) -

EFC

EFC (constant) =

1 2 EFC

Need (variable)

3

Financial Aid Applications • Free Application for Federal Student Aid (FAFSA) • Institutional Financial Aid Application

Free Application for Federal Student Aid(FAFSA) • Free • A standard form that collects demographic and financial information about the student and family • Use it to apply for federal and state student grants, work study, and loans • May complete the paper FAFSA or on-line (FAFSA on the Web)

FAFSA on the Web

• • • Web site: www.fafsa.gov

2014-2015 FAFSA available January 1, 2014 FAFSA on the Web Worksheet: • Used as “pre-application” worksheet • Questions follow order of FAFSA on the Web

Student Financial Aid (SFA) Pin • • • • Web site: www.pin.ed.gov

Sign FAFSA electronically Not required, but speeds processing Can request PIN prior to January 1, 2014 May be used by students and parents throughout aid process, including subsequent school years

Tips before starting

• Read instructions • Do not need to have tax returns completed (“Will File”) • Do not have to wait until accepted for admission • All info “as of the date you complete the form”

Frequent FAFSA Errors

• • • • • • • • Parent and student 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

Paying for college

Historical approach

- work, pay as you go, or save up enough money

Current approach

1.

Past - save from day one, plan ahead 2. 3. Present - adjust lifestyle, use current income, grants and scholarships Future - loans, long term payments

Categories of Financial Aid

• Need-based • Non need-based

Sources of Financial Aid

• Federal government • States • Private sources • Civic organizations and churches • Employers

Common Federal Aid Programs • Federal Pell Grant • Federal Supplemental Educational Opportunity Grant • Teacher Education Assistance for College and Higher Education Grant (TEACH) • Federal Work-Study • Federal Perkins Loan • Federal Direct Loans • PLUS Loans

College Aid • • • • Academic Scholarships Other merit-based scholarships athletic, music, art, leadership, etc.

Endowed Scholarships Need-based Grants (State)

Other Sources

 National and Community Service (AmeriCorps)  Veterans Benefits  Military Service Scholarships (ROTC)  Bureau of Indian Affairs (BIA) Grants  Vocational and Educational Services for Individuals with Disabilities (VESID)

America Recovery and Reinvestment Act of (ARRA of 2009)

American Opportunity Tax Credit –

Up to $2,500 per student for families with incomes less than $160,000

Special or Unusual Circumstances • Change in employment status • Medical expenses not covered by insurance • Change in parent marital status • Unusual dependent care expenses

Estimating your Eligibility for Financial Aid • FAFSA4caster.ed.gov – estimates your eligibility for federal student aid • Net Price Calculator – Institutions must now include on their website a calculator that provides the net price for first-time, full-time degree-seeking students.

Helpful Hints • • • • • Apply Beware of scams Pay attention to deadlines Importance of grades Ask questions!

Financial Aid Calendar

Senior Year of High School • • • • • January/February -- apply for aid March/April -- receive financial aid award letter from college May 1st -- reply date Summer -- apply for loans August/September -- classes begin, aid applied to account

• • • • • • • • • • • • Financial Aid information on the Internet

www.finaid.org

www.students.gov

www.fastweb.com

www.nasfaa.org

www.Mapping-your-future.org

www.collegeboard.org

www.salliemae.com

www.brokescholar.com

www.collegefortexans.com

www.collegeweeklive.com

www.college.gov

www.studentaid.ed.gov

For Additional Information

CONTACT THE LETU FINANCIAL AID OFFICE 800.759.8811