Transcript Financial Aid Fundamentals

How can you pay for
college?
 Savings
 Yourself
 Parents
 Financial Aid
What do college costs
include???
Tuition & Fees
+ Books & Supplies
+ Room & Board
+ Transportation
+ Misc. Living Exp.
= Cost of Attendance
(COA)
COA varies widely
from institution to
institution.
Expected Family Contribution (EFC)
(Federal Methodology established by U.S. Congress)
•Determined by the filing of the Free Application
for Federal Student Aid (FAFSA)
•An index used to calculate eligibility for aid
•Two components:
•Parent contribution
•Student contribution.
*Does NOT change no matter what school you go
to!
Main Determinants Of the EFC
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Income of both student & parents
Assets of both student & parents
Family Size
Number in College
Age of the older parent
Adjustments to EFC may be made by the Financial Aid
Office due to Verification and/or Special Circumstances
that limit ability to pay.
Arriving at the amount of Financial
Need…
Cost of Attendance (COA)
~ Determined by School
(-)
Expected Family
Contribution (EFC)
~ Determined by the Government
(=)
FINANCIAL NEED
(Varies by School; Amount your financial aid is
based on)
Almost EVERYONE is eligible for
some type of financial aid, but….
YOU MUST
APPLY TO FIND
OUT!
And it’s FREE!
NEVER pay to
file the FAFSA!
File the FAFSA each year after
you’ve completed your tax returns!
(Be sure to be aware of school
financial aid deadlines!) File Early!
UW Colleges Deadline:
April 15th!
File the FAFSA each year at
www.fafsa.gov
What is
Financial Aid?
1. To assist students in paying
for college.
2. To provide opportunity &
access to higher education.
The family has primary
responsibility for financing
post-secondary education
Financial aid is only the
BRIDGE
1. US Department of Education
The federal agency that provides funding in the form of
grants, work study and loans.
2. State
The Higher Education Aids Board (HEAB) manages state
aid in Wisconsin
3. Colleges & Universities
Schools may offer their own scholarship, grant,
work-study & loan programs, with each setting its own
requirements.
Gift Aid (Free $$$)
Grants:
Federal
•Federal PELL Grant
•Federal Supplemental Educational
Opportunity Grant (SEOG)
•TEACH Grant (NOTE: These will turn into
loans if obligations are not met)
State
Institutional
More Gift Aid (Free $$$)
Scholarships
1.
2.
3.
Civic organization scholarships
a.
High School
b. Local Public Library
Private Business Scholarships
FREE Online scholarship searches (BE
CAREFUL!)
Other Sources of Funding
1.
Parental Affiliations
1.
Employers & Labor Unions
2. Religious & Community Organizations
3. Clubs and Civic groups
Additional Government
Resources
1.
2.
3.
4.
5.
6.
Corporation for National & Community Service
Veteran’s benefits & tuition waivers
ROTC Scholarships and/or stipends
Bureau of Indian Affairs (BIA) Grants
State Divisions of Vocational Rehabilitation (DVR)
Health & Human Services Loan & Scholarship
Programs
Self Help Aid
1. Employment (Must be earned as wages)
1. Federal Work-Study
2. Institutional work Programs
3. Off Campus employment
2. Loans (Must be repaid)
1. Federal Perkins Loan
2. Federal Stafford Loan
1. Subsidized (Must exhibit financial need to
qualify)
2. Unsubsidized
3. Federal PLUS Loan (parent)
4. State Loans
5. Institutional Loans
6. Private-Alternate Loans
Federal Student Loans
•Every family should file a FAFSA. Regardless
of income, every student qualifies for a
Federal Direct Loan, if they meet the basic
eligibility requirements
•Benefits of a federal student loan
•You don’t have to repay until you leave school
•Lower interest rates than credit cards
•Credit record is not needed
•Co-signer is not required
PLUS vs. Private/Alternative
Loan
Compare the Differences:
•Interest Rate (variable vs. fixed)
•Borrower/Co-signer requirements & qualifications
•Minimum and Maximum loan amounts
•Interest accrual
•Deferment & Forbearance options
•Fees (origination and repayment)
•Repayment period
•Consolidation options
Borrowing Tips!!
•Before borrowing, think about your ability to make
the monthly payment when you leave school (student
loan calculators are available online)
•Borrowers are free to choose any participating
lender when borrowing under an alternative loan
program
•Borrow only what is needed for direct educational
expenses and avoid borrowing funds for
discretionary spending
STATE AID
Who may receive state aid?
•
State financial aid is available to Wisconsin
residents enrolled at non-profit colleges
and universities based in Wisconsin:
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University of Wisconsin System
Wisconsin Technical Colleges
Independent Colleges & Universities
Tribal Colleges
Who may not receive state aid?
State statutes prohibit students from
receiving state financial aid who are:
1. If males 18-26 are not or did not register
with Selective Service, they cannot
receive federal or state aid.
2. Listed on the Dept. of Workforce
Development’s Statewide Child Support
Lien Dockets.
1. Students on the Lien Docket may
still receive state loans).
Applying for State Aid
1. HEAB receives FAFSA data for all Wisconsin
residents
2. HEAB recommends that ALL students file the FAFSA,
regardless of income-students should file as soon
after January 1 as possible
3. Veterans should also file the FAFSA-they may be
eligible for aid even if they are getting tuition
remissions
4. The FAFSA is the only application for Wisconsin’s
Two major grant programs:
• Wisconsin Higher Education Grant (WHEG)
• UW, Technical Colleges, Tribal Colleges
• Wisconsin Tuition Grant (WTG)
• Independent Colleges & Universities
Receiving State Aid
•HEAB notifies the college or university
financial aid offices of each student’s eligibility
for state financial aid.
•The financial aid offices include all state aid in
the student’s financial aid package.
State Financial Aid Programs
1. Programs for Students with Financial Need
• FAFSA
•
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WHEG
WTG
2. Programs for Students with Financial Need who must also
meet Additional Requirements
• FAFSA & Additional Application or Nomination
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Hearing & visually handicapped Student Grant
Indian Student Assistance Grant
Minority Undergraduate Retention Grant
Nursing Student Loan
Talent Incentive Program Grant
3. Programs Not Based on Financial Need
• Application or Nomination: FAFSA recommended
but not required
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•
Academic Excellence Scholarship
Minnesota-Wisconsin Tuition Reciprocity Program
•
Check with the FA Office website for the schools you are
considering to inquire about other state and institutional
loans.
Other Financing Options
1. School Payment Plan (spread over
several months)
2. Home Equity Loans (longer
repayment, tax deductible)
3. Life Insurance Policy Loans
4. Retirement Plan Loans - These
deductions will count as income on
next year’s FAFSA.
5. 529 Plan Withdrawals
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Website: www.pin.ed.gov
Students AND One Parent need a PIN
PIN can be seen immediately
 Instantly view online
 By email immediately, with a link to retrieve your PIN
 By postal mail in 7-10 days
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Can also be used for:
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Renewal on the Web
Corrections on the Web
National Student Loan Database
Signing Promissory Notes for student/parent loans
A PIN Should not be shared. The unauthorized use of a
PIN by anyone but the owner may result in the
deactivation of the PIN or the invalidation of
signed documents, including FAFSAs and
promissory notes.
Should be filed electronically (Paper filing is less accurate and
takes much more time)
FAFSA STEPS:
1.
2.
3.
4.
5.
6.
7.
General Student Information
Student’s financial Data
Dependency Questions
Parent data (dependent students)
Household size (independent students)
Schools and school codes
Signatures
Frequent FAFSA Errors
•Missing Signatures/PIN
•Wrong Social Security Number
•Divorced/remarried parent information
•Income earned by parents/stepparents
•Untaxed income
•Incorrect reporting of US income taxes paid
•Household size
•Number in post-secondary education (cannot include parent)
•Real estate and investment net worth/small business net worth
•Not using name listed on Social Security card
•Wrong state of residence; info will not go to HEAB
•Reporting parent data in student section
•NOT APPLYING AT ALL
For FAFSA Purposes,
Who is a Parent?
1.
2.
3.
4.
5.
Two biological parents married to each other
Divorced or separated parents
Step-parent
Widowed parent
Legal or adoptive parent
Divorced/Separated Issues
1. FAFSA is to be completed using parent with whom
the student lived with more in the past 12 months.
If student did not live with one parent more than
the other, give answers about the parent who
provided more financial support during the past 12
months, or during the most recent year that the
student actually received support from a parent.
2. If this parent has remarried, step-parent
information must be included on the FAFSA.
SPECIAL CIRCUMSTANCES?
Contact the Financial Aid Office
•Divorce/Separation after the FAFSA has been
filed
•Loss of income or benefits
•One-time income
•Death or Disability of student or parent
•Medial/Dental expenses not covered by
insurance
•Dependency override
**NOTE: Professional judgment is at the sole
discretion of each institution.
Professional Judgment by
Financial Aid Administrators
•Adjustments are determined by each institution
on a case-by-case basis.
•Another institution may or may not
automatically accept a professional judgment
made by another institution.
•The decision must recognize the unique
situation of the student and must be
documented.
IRS Data Retrieval Tool – NEW
•Federal Student Aid and the Internal Revenue
Service collaborated to develop a solution that
simplifies FAFSA completion.
•The IRS Data Retrieval tool will allow FAFSA
on the Web applicants to request and retrieve
their income and tax data from the IRS
•Once the data is retrieved from the IRS, it can
be transferred to FOTW (FAFSA on the Web).
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If required by your school
You need to be admitted to a school or no
financial aid award will be generated!
MAKE SURE TO MEET ALL REQUIRED
DEADLINES!!!!
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The earliest a student can file the FAFSA for
2011-2012 academic year is January 1, 2011
Check with the colleges at which the student
plans to apply for institutional deadlines and
requirements
Failure to apply early may result in less aid
even if eligible
Student must re-apply for aid every year.
Renewal notification is sent to the students in
early January. Students with a valid email
address will receive email reminders. Others
will receive a paper reminder.
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FAFSA results are sent electronically to the college(s)
student selected (information will only be sent to top
three schools listed)
Students and parents will receive the results of their
FAFSA (Student Aid Report or SAR) by email (or regular
mail)
If FAFSA is rejected, follow the instructions to correct it!
If FAFSA corrections are necessary, go to www.fafsa.gov
and “make corrections to processed FAFSA.”
Students may be required to verify the information
submitted on the FAFSA
Contact the college Financial Aid Office with any special
circumstances
After student is admitted to a college, a financial aid
package will be prepared.
DON’T GET STUNG!
• NEVER Pay a fee to file the FAFSA
•When filing a FAFSA, make sure you go
directly to www.fafsa.gov (NOT
www.fafsa.com)
•Contact the financial aid office if you need help in
complete the FAFSA
Proceed with Caution!
NEVER pay for financial aid assistance
(including financial aid nights, campus tours
or scholarship searches)!
Be aware of scam tactics:
1.
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3.
“If you use our services, you’re guaranteed to get at least $2000 in
student aid for college, or we’ll give you your money back.”
“Appling for aid is complicated. We’re the only ones who can help
you through the process and find all the aid for which you’re
eligible.”
I’d like to offer you a scholarship (or grant). All I need is your bank
account information so the money can be deposited and a
processing fee charged.”
Contact the Better Business Bureau if you have questions regarding the
legitimacy of any questionable offer!
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Start with tuition, fees, room & board, books
Subtract grant & scholarship offers only
Do not subtract Federal Work Study as a lump
sum disbursement because students are paid
for hours worked.
The difference is your “net cost”
Always compare NET COST!
Thank you for coming tonight.
Have a safe drive home!