FINANCING YOUR EDUCATION

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Tips

 Prepare a calendar of admission & aid application deadlines  Determine which forms are required & the deadlines by which each form needs to be submitted. It is imperative to meet the deadlines.

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Tips

 Gather information about both need-based & merit-based financial aid programs. Make sure you understand the difference  Read all correspondence sent by the forms’ processors, the colleges or universities to which you are applying & the scholarship granting agencies 3

Tips

 Reply promptly to all requests for new information or for clarification of information submitted.

 Ask plenty of questions 4

Types of Aid

 Need-based vs. merit-based aid 5

Private Sources (Merit)

 Foundations, businesses, charitable organizations, Colleges  Deadlines and application procedures vary widely  Begin researching private aid sources early  Free Scholarship searches

Civic Organizations and Churches

 Research what is available in community  To what organizations and churches does student and family belong?

 Application process usually spring of senior year  Small scholarships add up!

Employers

 Companies may have scholarships available to the children of employees  Companies may have educational benefits for their employees

Private Scholarship Search Free

Internet scholarship search engines:  FinAid on the Web: www.finaid.org

 College Board: http://apps.collegeboard.com/cbsearch_ss/welcome.jsp

  FastWeb: www.fastweb.com

Illinois Student Assistance Commission (ISAC) www.collegezone.com

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What is need?

Variables: Cost of attendance (-) Parent Contrib. & Student Contrib. or EFC = Financial need 10

Cost of attendance

 Tuition and fees  Room and board  Books, supplies, transportation, & miscellaneous personal expenses, including documented costs for a personal computer  Loan fees  Study abroad costs 11

Need Varies Based on Cost

1 2 Cost of Attendance (Variable) 3 EFC Expected Family Contribution (Constant) X Y EFC Need (Variable) Z

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Principles of Need Analysis

 To extent they are able, parents have primary responsibility to pay for dependent child’s education  Students also have responsibility to contribute to educational costs   Families should be evaluated in their present financial condition Family’s estimated ability to pay educational costs must be evaluated in equitable and consistent manner, recognizing that special circumstances may affect family’s ability to pay 13

Parents’ contribution is based on a combination of:

 Previous year’s income  Parents’ assets 14

Student’s Contribution

20% or 25%of a student’s assets + a portion of a student’s income from the previous year 15

Family Contribution

 Parents’ contribution  Student’s contribution 16

Forms & Documents

 Free Application for Federal Student Aid (FAFSA)  Institutional Aid Application  CSS Profile Form  Federal income tax returns  Non-Custodial Parents’ Statement (NCPS) or Non-Custodial Profile (NCP) 17

FAFSA on the Web (FOTW)

 Web site: www.fafsa.ed.gov

 2013-14 FAFSA on the Web available on or after January 1, 2013  Pre-Application Worksheet:  Available prior to January 1 st  Questions follow order of FAFSA on the Web 18

FAFSA on the Web (FOTW)

 Good reasons to file electronically:  Built-in edits to help 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 19

PIN Registration

 Web site: www.pin.ed.gov

 May be used by students and parents throughout aid process, including subsequent school years 20

Frequent FAFSA Errors

        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 21

FAFSA Processing Results

 CPS notifies student of FAFSA processing results 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 can view SAR on-line at www.fafsa.gov

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IRS Data Retrieval Tool

 While completing FAFSA on the Web (FOTW), applicant may submit real-time request to IRS for tax data  IRS will authenticate taxpayer’s identity  If a match is found, the IRS sends real-time results to applicant in new window  Applicant chooses whether or not to transfer data to FOTW 23

CSS Profile Form

      Application is customized Fee assessed depending on the number of colleges/universities to which Profile form will be sent Fee waived automatically depending on information entered on Profile form Register, apply, and pay on-line at www.collegeboard.com

Non-Custodial Profile (NCP) available

Paper forms are not available & only “electronic” payment accepted

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Federal Pell Grant

 Awarded to eligible undergraduates pursuing first baccalaureate degree and certain students enrolled in post baccalaureate teacher certification or licensing programs  Portable  Actual award amount based on COA, EFC, and enrollment status  Annual minimum & maximum vary: for 2012-13 the maximum award for a full-time student is $5,550. 25

Federal Supplemental Educational Opportunity Grant (FSEOG)

 Eligible students:  Undergraduates pursuing first baccalaureate degree  Awarded first to students with “exceptional financial need” (eg., students with lowest EFC)  Priority to Federal Pell Grant recipients  Annual award amounts:  $100 minimum  $4,000 maximum 26

Teacher Education Assistance for College and Higher Education (TEACH)

    3.25 GPA each term or qualifying score on admissions test for incoming students Agree to teach full time for at least four years within eight years of graduation at a school serving a high percentage of low income students (Title I schools) Must teach math, science, a foreign language, bilingual education & English language acquisition, special education, or another field designated as a high need one, or teach as a reading specialist Grants funds become a Direct Unsubsidized Stafford Loan if student does not fulfill teaching requirement 27

Illinois Monetary Award Program (MAP) Grant

 Need-based grant available only to Illinois residents who enroll in Illinois post-secondary institutions  Available only to U.S. citizens or permanent residents  Eligibility determined from data on FAFSA  Current maximum award amount is $4,720 28

Federal Work-Study (FWS) Earnings

    Eligible students: Undergraduate, graduate, and professional students Employment may be on or off campus Eligible employers:  Schools  Federal, state, or local public agencies  Certain private nonprofit and for-profit organizations Schools must use portion of FWS funds for community service employment activities 29

Federal Perkins Loan

 Eligible students:  Undergraduate, graduate, and professional students  Priority to students who show “exceptional need,” as defined by school  Loan amount varies  Maximum annual loan amounts:  $5,500—undergraduate students  $8,000—graduate and professional students 30

Federal Perkins Loan

 Interest rate: 5%  9-month grace period  Repayment period may be up to 10 years  Deferment and cancellation provisions available 31

Federal Direct Stafford Loan

  Subsidized: Must demonstrate “need” Unsubsidized: Not based on “need” 

Base

annual loan limits (combined subsidized and unsubsidized):  $5,500 for 1st year undergraduates; maximum subsidized $3,500  $6,500 for 2nd year undergraduates; maximum subsidized $4,500  $7,500 for each remaining undergraduate year; maximum subsidized $5,500 32

Subsidized Federal Direct Stafford Loan

Interest rate: 3.4% for loans made from July 1, 2012 to June 30, 2013 Interest does not accrue (in-school) Loan fee based on principal amount of each loan of 1.0% 33

Unsub. Federal Direct Stafford Loan

Fixed interest rate of 6.8% Interest accruing Loan fee based on principal amount of each loan of 1.0% 34

Federal Direct Stafford Loans (

subsidized

& unsubsidized)

 Repayment begins 6 months after student ceases to be enrolled at least ½ time.

 Maximum repayment period between 10 and 30 years depending on repayment plan chosen  Deferment and cancellation provisions are available 35

PLUS

 Loan program for parents of dependent undergraduate students as well as graduate and professional students  Annual loan limit: no annual or aggregate amounts, except parent or graduate/professional student may not borrow more than the difference between the cost of attendance and other financial assistance the student receives  Fixed interest rate: 7.9% (interest accruing) 36

PLUS

 Loan fees based on principal amount of each loan: fixed 4% loan fee  Repayment begins 30 days after loan is fully disbursed to parent borrowers  It is possible to defer repayment of principal for up to four years (as long as the student is enrolled at least half-time) 37

Decisions

Cost of Attendance

(–)

Parent Contribution

(–)

Student Assets or EFC

=

Financial Need Self-help  Expected Summer employment  Student Loans  Term-time/FWS employment

Decisions cont…

Cost of Attendance (-) Family Contribution or EFC (-) self-help (-) Federal & outside grants & scholarships = need for Institutional grant funds Plus Loans??



Aid Decisions Student Loans

 Federal Stafford (subsidized & unsubsidized) Federal Perkins

Summer and Term-time employment (may be Federal Work/Study) Government Grants

 Federal Pell Grant, Federal Supplemental Educational Opportunity Grant (FSEOG), & Illinois Monetary Award Program (MAP) Grant

Privately funded awards –

reduce self-help

Institutional Funds

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