Transcript Let Me Show You the Money!”

Funding a College Education
• A Financial Aid
Presentation
• by
• Judy Becker
• University of
Wisconsin-Waukesha
Financing Your Education
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What is goal of financial aid?
What aid is available?
How do I apply?
How is financial need
determined?
• What is the role of the
financial aid office?
Goal of Financial Aid
• To provide opportunity and access to higher
education.
• To assist students in paying for college.
Basic Principles of Financial Aid
The family has primary
responsibility for financing
postsecondary education.
Financial aid is the BRIDGE
What is Financial Aid?
•Scholarships
•Grants
•Loans
•Employment
opportunities
Types of Financial Aid
• Scholarships
- Institutional
- Noninstitutional
College Scholarship Fraud
• Scams net $5 million annually
• 350,000 students/parents
affected
• Selling what you can get for
free
• Never pay to find a scholarship!
• Never pay a scholarship
provider to apply!
Don’t Get Scammed!
Six Warning Signs
“This scholarship is
guaranteed or your
money back.”
“You can’t get
this information
anywhere else.”
“May I have your
credit card
number or bank
account number
to hold this
scholarship?”
“The scholarship will
cost you some money.”
“We’ll do all the work.”
“You’ve been selected by a
‘national foundation’ to receive a
scholarship” or “You’re a finalist in
a contest.” (that you didn’t enter).
National Fraud Information
Center 1-877-382-4357
Avoid Being Scammed
• For information about financial aid scams and tips to
avoid being scammed check:
– Department of Education’s web site at:
http://studentaid.ed.gov/students/publications/lsa/i
ndex.html
– Federal Trade Commission’s web site at:
www.ftc.gov/bcp/conline/publs/alerts/ouchart.htm
• To check the legitimacy of scholarship search
organizations or individuals check Better Business
Bureau’s web site at:
http://www.bbb.com/
FREE Scholarship Services
Gift Aid (FREE $$$)
Grants & Scholarships
• Federal (Administered by schools)
• Federal Pell Grant
• Federal Supplemental Educational Opportunity
Grant (SEOG)
• Academic Competitiveness Grant
• SMART Grant
• State (Administered by HEAB, DPI-WEOP & Schools)
• Institutional (Endowment funds from Schools)
• Private (Various outside organizations)
Self-Help Aid
Loans
(must be repaid with interest)
• Federal Perkins Loan
• Federal Stafford Loans (school
determines the loan program)
– Federal Family Education
Loan (FFEL) Program
– William D. Ford Federal
Direct Loan Program
• Federal PLUS Loan (Parents)
• State Loans
• Institutional Loans
• Private-Alternative Loans
Employment
(must be earned as wages)
 Federal Work-Study
 Institutional Work-Study
Programs
 Off Campus employment
New Stafford Loan Limits
• Effective July 1, 2007
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Freshman $2,625  $3,500
Sophomore $3,500  $4,500
Junior $5,500
Senior $5,500
5th Year & beyond $5,500
• Cumulative maximum for dependent
undergraduate remains at $23,000
Free Application for Federal Student
Aid
Collects family’s personal and financial information used
to calculate the EFC
May file the FAFSA in one of two ways:
1. FAFSA on the Web
2. Paper FAFSA
FAFSA on the Web:
www.fafsa.ed.gov
Advantages to Applying Online:
• Complete and send FAFSA on the internet directly to
federal processor
• Saves 7-21 days compared to paper FAFSA
• Access from anywhere
• Automatically edits data as you enter it and detects errors
before submission
• Skip logic: asks only what you must answer
• English or Spanish versions
• Electronic Signature
• E-mail notification of results
• Detailed online help screens
• Real-time online chat for immediate answers
• Instant access to EFC estimate
What IS a PIN?
www.pin.ed.gov
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Personal Identification Number
Students and parents can get PINs
Electronic signature for FAFSA on the Web
PIN delivered by e-mail within 24-36 hours
– (by regular mail in 7-10 days)
• Can also be used for:
– Renewal on the Web
– Corrections on the Web
– National Student Loan Database
– Signing promissory notes for
student/parent loans (Perkins, Stafford,
PLUS)
Seven Steps
• Step One: Student Information
• Step Two: Student Tax Information
• Step Three: Student Status - Dependent vs.
Independent
• Step Four: Parent Information
• Step Five: Student Household Information
• Step Six: College Listings
• Step Seven: Read, Sign, and Date
Independent Student Definition
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At least 24 years old;
Graduate or professional student;
Married;
Has child for whom student provides more than half
support;
Has dependent other than child or spouse who lives
with student and for whom provides more than half
support;
Orphan or ward of the court;
Veteran of the U.S. Armed Forces; or
Determined to be independent by the financial aid
administrator
(Parents refusal to provide support or financial data is insufficient to make a
student independent regardless of tax filing status)
For Federal Methodology (FM)
Who is a Parent?
• Two biological parents married to each other
• Divorced or separated parents
• Stepparent
• Widowed parent
• Legal adoptive parent
Divorced/Separated Issues
• FAFSA is to be completed by parent with whom the
student is living.
• If parent has remarried, stepparent information must
be included on the FAFSA.
• Some higher cost schools will ask for a
Divorced/Separated Supplement to be completed on
other parent to determine eligibility for college
programs.
Step Six: College Listings
• List Up to 6 Colleges
to Receive this
Information
• School
Codes/Addresses
• Where Student Will
Live while in School
Step Seven: Read, Sign & Date
• Student (and Parent) Signature/Date
• Preparer’s Information/Signature/Date
• Mail Form or Signature Page/Submit via Internet
Frequent FAFSA Errors
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Missing Signatures/PIN
Wrong Social Security Number
Divorced/remarried parent information
Income earned by parents/stepparents
Untaxed income
U.S. income taxes paid
Household size
Number in postsecondary education
Real estate and investment net worth
Not using real name
NOT APPLYING AT ALL
After you file the FAFSA
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Results are sent electronically to the college(s) the
student selected.
Students & Parents will receive the results of their FAFSA
by e-mail (or regular mail) - Student Aid Report (SAR).
Students may be required to verify the information
submitted on the FAFSA (submit tax forms).
Contact the college with any Special Circumstances.
After the student is admitted to a college, a financial aid
package will be prepared.
Special Circumstances?
Call the Financial Aid Office
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Divorce/Separation
Loss of income or benefits
One-time income
Death or Disability of student or parent
Medical/Dental expenses not covered by insurance
Elementary or secondary school tuition
Dependency override
(Note: Professional Judgement is at the sole discretion of each institution.)
Financial Need Defined
Cost of Attendance (COA)
– Expected Family Contribution (EFC)
= Financial Need
What Are the Costs?
Tuition and Fees
+ Room and Board
+ Transportation
+ Books & Supplies
+ Miscellaneous Living Expenses
= Cost of Attendance (COA)
Main Determinants of the
EFC
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Income
Assets
Family size
Number in College
Age of the older
parent
Adjustments to EFC may be made due to
Verification and/or Special Circumstances
that limit ability to pay
Financial Need Varies By
School Cost
1
X
2
Y
3
Z
EFC
Cost of
Attendance
(Variable)
Expected Family
Contribution
(Constant)
N
E
E
D
EFC
Financial Need
(V ariable)
Financial Need Varies by
School Cost
1
2
3
Cost
$ 27,394 $ 17,425 $ 12,056
Less
EFC
Need
$ 9,873 $ 9,873 $ 9,873
$ 17,521 $ 7,552
X
Y
$ 2,183
Z
Timelines
• The earliest a student can file the FAFSA for the
2007-2008 academic year - January 1, 2007.
• 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.
• Students must re-apply for aid every year. Renewal
notification is sent to students towards the end of
each calendar year.
Sample Questions for the
Financial Aid Office
1) What is the average cost for the first year? Estimates for future
years?
2) Does applying for aid affect the admission decision?
3) What type of aid does the school have? Need-based or Merit?
4) What applications, besides the FAFSA, are needed to apply for
aid?
5) What is the priority deadline date for all types of financial aid?
6) When will I be notified about a financial aid award?
7) How does the aid package normally change from year to year?
8) What are the conditions of the aid package?
9) Is there an opportunity to appeal if the package isn’t enough?
10) How does the College bill for tuition, fees, etc.?
Helpful Tips
• Apply for Financial
Aid early
• Apply every year
• Other sources of aid
• Special Circumstances
• Ask FAA questions
Other Financing Options
» School Payment Plans (spread over
several months)
» Home Equity Loans (longer repayment,
tax deductible)
» Life Insurance Policy Loans
» Pension Plan Loans
» 529 Plan withdrawals
Government Resources
• Corporation for National and Community Service
• Veteran’s benefits
• ROTC Scholarships and/or stipends
• Bureau of Indian Affairs (BIA) Grants
• State Divisions of Vocational Rehabilitation (DVR)
• Health and Human Services Loan and Scholarship Programs
Other Sources of Funds
• Parental Affiliations
– Employers & Labor Unions
– Religious and Community Organizations
– Clubs and Civic groups
• Civic organization scholarships
– High School
– Local Public Library
• Private business scholarships
Role of the Financial Aid Office
• Answers your questions
• Determines financial need eligibility for various types of
financial aid
• Verifies applicant data when required
• Develops policy and procedures to distribute aid
• Packages aid from all available sources
• Sends award notification letters/e-mails with information on:
– Costs
– Amount awarded from each aid program
– How and when aid will be disbursed
– Terms and conditions of student’s award
Web Demonstration Site
• FAFSA on the Web and FAA Access
demonstration sites will be available later this
year
– To access sites, go to
http://fafsademo.test.ed.gov
– Enter:
• User Name: eddemo
• Password: fafsatest
• Click on FOTW or FAA Access buttons at
bottom of screen to access demo site
• Available until following December
Questions?