Transcript Training
Financial Aid: An Overview A Presentation of Introduction Tonight you will learn: What Financial Aid is Sources of Financial Aid The formulas used in determining your eligibility When and how to apply Resources for more information Who Are You? Is this process new to you? Where is your son or daughter thinking about attending college? What is the cost of that institution? How will you pay for it? Agenda Learn the language: Review some simple vocabulary Financial Aid Primer: Forms, Formulas and Funds How do I apply? Financial Aid Calendar Review of the Forms What is Financial Aid? Grants, Scholarships Free Gifts Do not have to be repaid Loans Money that must be repaid Borrowed by student, parent, or both Work Study Money student is given the opportunity to earn IOU $$ Grants & Scholarships • Pell Grant • MASSGrant • SEOG • Tuition Waiver • Fee Grant • Institutional Grant • Private Scholarship • Massachusetts Performance Bonus Educational Loan Programs • Massachusetts No Interest Loan • Federal Perkins Loan • Federal Direct or Stafford Loan (subsidized or unsubsidized) • Institutional loans • Other state loans Over $68 Billion given out in Financial Aid in 1999-2000 19% 11% 52% 5% 4% 4% 6% Source: The College Board Federal Loans Non-Federal Loans Other Federal Programs Federal Campus-Based State Grant Programs Federal Pell Grants Institutional & Other Grants Financial Aid Basic Premises STUDENTS have the primary responsibility for contributing to their education to the extent that they are able PARENTS are responsible for contributing to their children’s education to the extent that they are able FAMILIES with similar circumstances will be expected to contribute similar amounts to higher education; those with different circumstances will be expected to contribute different amounts Financial Aid BASIC FORMULA Cost of Attendance (COA) - Expected Family Contribution (EFC) = Financial Aid Eligibility/Family Need COST OF ATTENDANCE (COA) Tuition and Fees Supplies + Room and Board + Transportation Books + + + Other Personal Expenses The Expected Family Contribution IS a measure of parent’s capacity over time to absorb educational costs IS NOT a dollar amount expected from current income or assets. IS NOT an estimate of “extra” cash available. Elements of Federal Methodology The FAFSA Financial Aid Funnel Used to award all Federal Aid at public and private schools Uses both parent and student information (for dependent students) Uses standard income and asset protection allowances Does not consider HOME EQUITY or Qualified Retirement Assets Expected Family Contribution (EFC) Current Federal Methodology STUDENT Contribution (dependent) Student Income 50% after taxes and income protection allowance of $2500 Student Assets PARENT Contribution + Parent Income 22-44% after taxes and income protection allowance Parent Assets* 3-6% after asset protection allowance 35% * Retirement & Home Equity not included in federal formula Divided by number in college EXPECTED FAMILY CONTRIBUTION Institutional Methodology for Institutional Funds Used by colleges to give out their own money Formula could vary widely from school to school Generally includes more assets than the Federal Methodology Home Equity often included Often requires additional applications/forms 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 $50,300 $70,000 $100,000 Parents' AGI Expected Parent Contribution will be: $40,000 $1,716 $1,716 $2,236 $3,108 $60,000 $6,171 $6,171 $7,282 $8,974 $80,000 $13,160 $13,160 $14,271 $15,963 2000-2001 Federal Methodology 23 How Does the Formula Work? COA $30,000 COA - EFC = NEED $25,000 Need EFC $20,000 $15,000 $10,000 $5,000 $0 Private A COA $30,000 Private B $25,000 State College/ University $10,000 Community College $5,000 The “Step” Approach to Awarding Financial Aid For Institutional Grants, Admissions Ranking can determine Financial Aid Awarded 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 Sources of Financial Aid Consider All Your Options! Federal Government State Government College / University Private Agencies (Kiwanis, Elks, church or synagogue group) Professional associations Parent’s employer ‘Financially’ Manageable During and AFTER the College years Estimate the ‘Total’ Cost of Education Look at your entire Financial Situation 4+ years of expenses PARENT STUDENT Make financial decisions that : Will not jeopardize Financial Security Comfortable Retirement Educating other children other financial goals Will not leave excessive debt Will not jeopardize financial independence after graduation “Insider” Tips Find out the deadlines and comply! Keep copies of what you send. “Guess-timate” on your applications If you have questions, ask! Look at all of your financing options Don’t rule out a school just because of its cost Apply to one or two financially ‘safe’ school Think about how you (parent & student) will pay your share of total college costs (2/4+ years) Financial Aid Application Materials FAFSA - Free Application for Federal Student Aid – Required by all colleges – Free form PROFILE – Some colleges need this – Paid form Institutional Application – One per school – Usually part of admissions packet REMEMBER! Business/Farm Supplement Forms must Non Custodial be filed Parent Statement EVERY YEAR. Tax Return Financial Aid VERIFICATION PROCESS Can be required by the federal government or by any institution is carried out by the institutions involves documentation of data provided on the application forms an award based on non-verified information is subject to change after the information has been verified The Financial Aid Calendar January (or earlier for Profile): Complete forms (BEST GUESS IS OK FOR INCOME) February (or earlier for Profile): Many school’s deadlines for forms Late February - March: Schools may call you with questions End of March - Early April: Admissions and Financial Aid notification mailed The Financial Aid Calendar (continued) April: Compare award letters from different schools May 1: DECISION DEADLINE Tell all schools yes or no May: Pay deposits (tuition, room and board) - about $500 June: Bill for the Fall semester, due by 8/1 or so November - December: Bill for the Spring Semester “I need more help!...” Higher Education Information Center 1(800) 442-1171 Federal Student Aid Center FAFSA Processing: 1-800-4-FEDAID College Scholarship Service Profile Processing: (800) 778-6888 Each college’s financial aid office Your high school guidance office Your state legislator’s office Still more help on the WEB... www.finaid.org www.fastweb.com Resources for: • Financial Aid • Scholarships • College Information HELPFUL HINTS IN COMPLETING THE FORMS • READ all the instructions • Complete the ENTIRE form, unless specifically instructed to leave something blank • Use number 2 pencil or a pen with black ink • Read “When You Fill Out This Form” on page 2 of FAFSA • Be sure to answer all questions on the form using information about the individual about whom the question is directed (e.g. Do not provide parent's social security number when asked to provide the student's social security number. ) • Use regular first-class mail. Sending the forms special delivery or by overnight mail or by any other special process to the P.O. Box indicated MAY DELAY RECEIPT of the forms by the processor • Notify all of the financial aid offices of institutions to which student applies regarding any unusual or special family circumstances not already reflected on both of the forms Let’s Fill Out the Forms Free Application for Federal Student Aid (FAFSA) – http://www.fasfa.ed.gov/ Profile Registration Form – http://www.collegeboard.org/profile THANK YOU!