Transcript How to pay for College - Middletown High School

Paying for College
Elizabeth Desi
Sr. Associate Director of Financial Aid
University of New Haven
Applying for Financial Aid

File the Free Application for Federal Student Aid
(FAFSA)


FAFSA is FREE
FAFSA determines eligibility for:

Federal grants and loans

State grants
Applying for Financial Aid

Institutions use the FAFSA to determine eligibility for
their need-based scholarships

Schools may require additional forms to determine
eligibility for financial aid


CSS Profile

Institutional Application
University of New Haven uses the CSS Profile to provide
earlier award information

UNH School Code is 3663
Completing the FAFSA

FAFSA on the Web


www.fafsa.gov
File 2015-2016 FAFSA if entering college Fall 2015


(Forms for 2 years on website – use correct year)

Have to complete FAFSA EACH YEAR

Available January 1
Two ways to sign

PIN – Sign Electronically

www.pin.ed.gov


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Real Time (“Display Now”)
Both Student and Parent need a PIN
Paper Signature Page
Completing the FAFSA

Can add up to 10 schools on the web application

Should complete and submit the FAFSA when you
are applying for Admissions providing you are
applying for Admissions after January 1.

Have to be offered Admissions before Financial Aid
is determined
Completing the FAFSA


Be Aware of Priority Filing Dates!

Submit FAFSA by School & State Priority Filing
Date – CT has had filing date as early as Feb 15

School & State funding is limited so file ON
TIME
Can enter estimated income information to meet
priority date, then make corrections after you file
tax returns
Completing the FAFSA

IRS Data Retrieval Tool



Populates your income information directly from the Internal
Revenue Service (IRS)
Complete & file your tax return

File Electronically – Wait 2 weeks to correct FAFSA

File Paper – Wait approximately 8 weeks to correct
Students selected for Verification

If don’t use IRS Data Retrieval, Tax Return Transcript is Required

Verification form & Other documentation Required
Note: Schools may have their own Verification process to
which they may request tax return transcripts and other
documentation beyond the federal requirements
Completing the FAFSA


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Parent and Student Information on FAFSA

Student’s Application

If 2 students in family, each complete an application &
Parent signs each
Divorced or Separated – Who completes?

Parent with whom student lived with most during the past
12 months

If lived with equally, the parent who provided more
financial support
If Parent Remarried

Step-parent information must also be included
Completing the FAFSA

If a dependent student’s parents are living together in
the same household, regardless of the parents’ marital
status or gender, the income and other information
about both legal parents must be included on the FAFSA

Parent marital status option on the FAFSA:

“Unmarried and both parents living together”
Completing the FAFSA

Legal Guardians who has custody of student does NOT
complete FAFSA with student

Student completes FAFSA on own
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Must provide court documentation to school

If no court documentation, parent must complete FAFSA
with student
Processed FAFSA


Student Aid Report (SAR)

Indicates your FAFSA has been processed

Indicates how family answered every question on the FAFSA
Review your SAR
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Indicates the next steps
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If there are issues that need to be resolved

Data Base matches – Social Security Number, Citizenship, Selective
Service

Will indicate if a student is selected for Verification

Can use to add schools or make corrections
EFC & the School

Results of the FAFSA is the Expected Family Contribution
(EFC)


Amount you as a family can contribute toward the
student’s education
Schools use the EFC to determine what types of
financial aid and how much they can offer to a student
Types of Financial Aid
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Scholarships
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Grants

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Free money – don’t have to repay
Loans


Free money – don’t have to repay
Have to repay
Student Employment

Have to work to earn the money
Sources of Financial Aid


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Federal
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Money from the federal government
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Money from the State in which you live
State
Institutional


Money from the College/University (merit, need-based,
athletic)
Private

Money from private agencies, organizations, civic groups, high
schools, churches, etc.
Cost of Attendance

School determines the Cost of
Attendance (budget)
•

different at each school
Cost of Attendance includes not only tuition,
fees, room, meals (Direct costs) – ALSO
Allowances for books, supplies, personal
expense, travel expense, misc expense
EFC & the School

School takes Cost of Attendance and subtracts
your EFC (results of your FAFSA) to determine
a students “financial need”
Cost of Attendance
-
Expected Family Contribution (EFC)
_______________________________
Financial Need
EFC & the School

If the EFC is less than the Cost of Attendance, the
student may be eligible for subsidized financial aid
such as grants, scholarships, subsidized student
loans and the parent PLUS loan
EFC & the School

If the EFC is greater than the Cost of Attendance, the
student may be eligible for unsubsidized financial aid
such as unsubsidized student loans and the parent PLUS
loan

Merit scholarships are based on a student’s academic
performance and can be awarded regardless of the EFC
Financial Aid Award Letters

The school communicates with the student via a
Financial Aid Award

Awards may be electronic or paper


If electronic, student would receive notice or email to
view their award information on line
Awards offered are listed on the Award Letter – Awards
make up a “Financial Aid Package”
Financial Aid Award Letters

Families should determine Direct costs of the
school


Tuition, Fees, Room, Meals and any other
expenses charged on the bill
May also want to factor in an amount for books –
An average amount per semester for student
enrolled full-time is $500 however the sciences,
engineering and some other classes may be more
expensive.
Financial Aid Award Letters

Families should understand each award listed

Is the award a LOAN? = Money you will have to repay

Is the award a scholarship or grant? = Money you won’t
have to repay

Are the scholarships offered by the school renewable and
if yes, what are the requirements?
Financial Aid Award Letters

Families should subtract the awards you want to accept
from the amount you will be billed by the school to
determine how much, if anything, you will need to pay
for the student to attend that school
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Some options for paying that balance:
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Federal Parent Loan
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Private Loan
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Tuition Payment Plan
Special Circumstances

FAFSA is based on “prior year income”

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Use 2014 income information for 2015-2016 FAFSA
Notify the Financial Aid Office of financial changes for
2015 if decreased from 2014
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Loss of Job – reduction in income
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Extra Medical Expenses
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Divorce or Separation
Loan Programs

Schools process federal student and parent loans
through Direct Lending
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Direct Loan program = The federal government is the
lender. The school communicates with the government to
process the educational loans
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Students will see the federal Direct Student Loan offered
on the Financial Aid Award
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May see federal Direct Parent PLUS Loan on Award
Loan Programs

The Direct Loan program offers the Federal Student
Loan for students and the Federal PLUS Loan for Parents

School will provide information regarding their process
and application procedure to apply for the loans - You
may also review school’s website for the process
Loan Programs

Students and Parents must sign Promissory Notes for the
loans

Students must also complete Entrance Loan Counseling
before borrowing the student loan
•
The loan counseling lets the student know their rights and
responsibilities as a student loan borrower
Student Loans

Direct Student Loans
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Low Interest rates
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Interest rate set July 1 each year - not to exceed 8.25% Fixed rate

Student is the borrower
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Students are eligible regardless of family income
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No penalty for early repayment of loan
Student Loans
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The Subsidized Loan will be offered to students who
demonstrate “financial need” based on the results of
the FAFSA (EFC) and other financial aid the student is
receiving
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Up to $3,500 for a first year student depending on
financial need
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July 1, 2014 Fixed interest rate of 4.66% for
undergraduates
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Government pays interest on Subsidized loans, & principal
is deferred while student is enrolled at least half-time
Student Loans
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Unsubsidized Student Loan
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Fixed interest rate is currently 4.66% for undergraduates
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Principal is deferred while student is enrolled at least halftime
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Interest accrues while student is enrolled. If not paid, it
will capitalize causing the balance of the loan to become
larger
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Interest is charged quarterly (every three months)
Example: $2,000 loan will accrue approximately
$100 of interest for a year therefore loan
balance will increase to $2,100 in one year
Parent Loan

The PLUS is a Federal Loan for parents to borrow, to assist
with paying educational costs

Interest rate is a fixed rate currently at 7.21%

Credit based loan – Government reviews for any negative
credit history

Repayment begins 30-60 days after loan is fully disbursed.
Parents normally borrow for the full year therefore the loan
will not be fully disbursed until spring semester loan disburses,
so repayment begins in February or March (option to defer
payment until after student is no longer enrolled at least halftime)

Repayment period up to 10 years (depending on loan amount
borrowed)
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No penalty for early repayment of loan
Parent Loan
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Parent may borrow up to Cost of Attendance minus
other financial aid the student is receiving (loans are
considered financial aid)

Borrowing up to the Cost of Attendance will allow the
parent to receive a refund (Remember: Cost of
Attendance is more than the actual bill). The refund
will act as a reimbursement for educational expenses
the parent may have paid to get the student to school
and settled in their dorm room

Parent has option of how much to borrow. Parent may
want to borrow only what they need to pay the bill
Federal Loans
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Parent Loans and Student Loans have Fees

Actual disbursement of loan that is deducted from the
student’s bill is lower than amount borrowed (by a small
percent)

Student loans approximately 1.073% in fees

Parent loans approximately 4.292% in fees

Example:

Parent Loan for $5,000 with 4.292% in fees will disburse to
the school in the amount of $4,785 ($2,392 per semester)

Student Loan for $3,500 with 1.073% in fees will disburse
to the school in the amount of $3,462 ($1,731 per
semester)
Parent Loan Denial
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Some parents may not meet the credit criteria for the
parent loan therefore the loan will be denied
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Options for Parents:
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Appeal the decision and request another review of Credit
History if something has changed (if cleared up
incorrect/negative issue on credit report)
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Obtain an Endorser (someone to co-sign the loan)

Allow the loan to be denied and student borrow LIMITED
AMOUNT of additional federal student loan
Parent Loan Denial

When a parent loan is denied, the government
allows the student to borrow additional
Unsubsidized Student Loan, however the amount is
limited (up to $4,000/year for Freshmen and
Sophomores, and up to $5,000/year for Juniors
and Seniors)
Private Alternative Loans

Sometimes students will need additional funding beyond
the financial aid that is offered, therefore there are
Private Alternative loans available through lenders

Be sure to review terms & conditions of Private
Alternative Loans. May have variable interest rate,
require student to make monthly payments
immediately, etc.

These loans are not as lenient in repayment as federal
loans. They do not have repayment options like federal
loans.

Students may borrow up to the Cost of Attendance
minus any other financial aid they are receiving (loans
are considered financial aid)
Private Alternative Loans
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The student is the borrower of the loan
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Loans are based on credit-worthiness – will likely
look at income to debt ratio
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Co-signer is usually required
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These loans may have VARIABLE interest rates
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Some now offering Fixed interest rates
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May REQUIRE interest to be paid immediately
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Could have fees
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Cannot consolidate with federal loans
Private Alternative Loans
Student applies with the lender and if loan is
approved, the school will determine student’s
eligibility for the loan and process if eligible
 Check for loan programs within the state
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Connecticut Higher Education Supplemental Loan Authority
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www.chesla.org
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Currently has 6.75% Fixed Annual Rate

Currently has a 3% fee
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Must make interest payments
Check for loan programs with your credit union for
competitive rates/terms
 Some lenders/agencies offer loans for parents

Payment Plans
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Most schools offer a tuition payment plan
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Many contract with outside vendors
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May offer a 10 Month interest free plan to pay off
the balance due
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Payments begin in June and end in March

Normally there is a fee to join (about $70 per
year)

Monthly payments are withdrawn from your bank
account for 10 months
Payment Plans
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Because these plans allow a shorter time to pay
the balance, you usually have to make a higher
monthly payment than you would in repaying a
parent loan
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Make sure you can afford the monthly payments
for the payment plan before signing up
Scholarship Searching
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Merit Scholarships
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Often offered through Admissions Office rather than
through Financial Aid Office
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Be sure to meet Admission Application dates & submit
appropriate paperwork to be considered
Scholarship Searching
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Make sure student completes ALL forms

Some Financial Aid offices have a separate form for
students to complete for scholarships

Some departments within the college or university may
have their own scholarships to offer and their own
process beyond the Financial Aid Office (may require an
audition, ie music)

A student should contact the department in which they
are majoring or review their website to determine
scholarship opportunities and the process

Some departments may offer scholarships to Freshmen,
others may not consider a student for scholarships until
the student “declares his or her major”
Scholarship Searching
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Community Service Organizations & Churches
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Company where your Parent is Employed
Scholarship Searching
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Search on your Own on the Internet
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Watch for Scholarship Scams
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Should not have to pay money to get FREE money
Don’t give bank account or credit card information
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www.zinch.com/scholarships
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www.fastweb.com
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www.collegeboard.com/paying
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www.eCampusTours.com/scholarship-search
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www.collegeanswer.com
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www.finaid.org/scholarships
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Finaid.org has scholarship listings categorized by unusual scholarships,
average student scholarships, community service scholarships, cancer
scholarships, scholarships for Hispanic and Latino students

https://collegesniche.com
Scholarship Searching
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Watch for scholarship scams!
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You should not have to pay money to get FREE money
6 things to look for in detecting a scholarship scam:
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“a scholarship guarantee” – No service can guarantee it will get you money.

“the service will do all the work” – No service can provide all of the personal information
required, fill out essays, or supply the references a scholarship may require.

“for a small fee we will give you a list of scholarships” – You should never pay any amount
of money for a scholarship. Applying for scholarships should be free.
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“you can only find this information here” – Scholarships, grants and awards for school are
available in directories and all over the web. No one organization has a monopoly on the
information
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“being a finalist in a contest you never entered or randomly being selected by a national
foundation to receive an award” – Most organizations only contact you after you have made
an inquiry

“everybody is eligible” – Scholarships are usually based on merit or need and restrictions
usually apply
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“a service needs your credit card or checking account information” – NEVER!
Other Resources
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U.S. Department of Education, Student Aid on the Web
www.studentaid.ed.gov

Select “Types of Aid”

Select “Learn More” in the “Scholarship Search” box

Select “FREE scholarship search tool” under “How do I find
scholarships?
State of Connecticut Dept. of Higher Education

www.ctdhe.org and select “Financial Aid” at top of screen
on right
Net Price Calculator

Go to www.newhaven.edu

Select “Quick Links”

Select “Net Price Calculator”

Provides an ESTIMATE of the financial aid you could
receive – This is NOT an award

Some funds are limited – may see in NPC results but not
on your Financial Aid Award

Try to provide accurate estimated information

Results will not be an accurate estimate if incorrect
information is provided
Paying for College
Questions?