Transcript Document

2013
Annual Statewide Financial
Aid Conference for High
School Counselors
November 5, 2013
Application
Process &
FAFSA
2
Free Application for Federal
Student Aid - FAFSA
• Apply on-line at: www.fafsa.gov (not .com!)
• 2014-2015 FAFSA available January 1, 2014
– The earlier, the better (for some types of aid)
• Check colleges’ web sites for priority deadlines
– Can complete with estimated tax figures and make
corrections later
• Carleton, Macalester, St. Olaf, Gustavus Adolphus
(and many east coast colleges) require CSS Profile
form in addition to FAFSA
3
– https://profileonline.collegeboard.com
FAFSA on the Web (FOTW)
www.fafsa.gov
•
•
•
•
•
•
•
•
4
•
Apply
Retrieve IRS data
Reapply
Apply for PIN
Find college
codes
Check status of
FAFSA
Make corrections
Add additional
colleges
Print SARs
FOTW Supported Browsers
•
•
•
•
•
•
5
Internet Explorer: 7.0 and above
Mozilla Firefox: 3.5 and above
Apple Safari: 4.0 and above
Google Chrome 4.0 and above
Opera: 10.0 and above
Opera mobile
2014-2015 FAFSA Changes
#5
• Draft in packet
• 2 new questions for student’s (#34) and parents’
(#82) tax filing status
– Only presented on FOTW if student or parents will
be tax filers
– Will help FOTW logic determine if tax information
can be imported with IRS data retrieval tool
6
• Parent field labels changed from “Father” and
“Mother” to “Parent 1” and “Parent 2”
• Field length for income and asset fields increased
to 7 digits
• Fields renumbered based on adding 2 new
questions
2014-2015 FAFSA Changes
The
BIG change:
• Dependent student will report information about
both legal (biological or adoptive) parents if the
parents are living together, regardless of the
parents’ marital status or gender
– Previously, student only reported information about
one parent (typically, custodial parent) if not married
7
• New response added to parents’ marital status –
‘Unmarried and both parents living together’
• Same-sex parents can now report marital status as
‘Married’ if married in jurisdiction that allows samesex marriages, even if now living elsewhere
2014-2015 FAFSA Changes
• ‘Unmarried and both living together’ will NOT be a
response for the student applicant’s own marital
status
• However, likely that student will be instructed to
report own marital status as ‘Married’ if same-sex
marriage took place in jurisdiction allowing samesex marriages, regardless of where student now
lives
– Guidance not yet issued by U.S. Dept of Education,
but legal analysis of Supreme Court ruling on Defense
of Marriage Act (DOMA) seems to suggest this
• Go over ‘Impact of Marital Status on the 2014-2015
FAFSA’ Handout #8
8
FAFSA on the Web 2014-2015
IRS Data Retrieval
• If applicant indicates filed taxes on FOTW, will
be prompted to use IRS data interface
– If chooses not to use IRS interface will be
subject to selection for verification
• IRS data available:
– 3 weeks after federal tax forms filed
electronically (70% of filers)
– 10 weeks after paper federal tax forms filed
(some have experienced longer delays)
• Not available until any tax owed the IRS is paid
9
FAFSA on the Web 2014-2015
IRS Data Retrieval
• IRS data retrieval can be used:
– While completing original FOTW
– As a later correction to FOTW
• Applicants will receive automatic
reminder emails to go back to FOTW
and use IRS data retrieval if:
– They provided estimated tax figures on
the FOTW
– Provided actual tax figures on FOTW but
did not use IRS data retrieval
10
Items Populated on FOTW
from IRS Data Retrieval
•
•
•
•
•
•
•
Adjusted gross income
U.S. income taxes paid
Untaxed IRA distributions and pensions
Education credits
IRA deductions
Tax exempt interest
Student’s and parents’ income from work if:
– Marital status is other than married
– If ‘married’, total income from work from tax form
will appear on screen and will need to separated
by student or parent for entry into FOTW fields
11
Items Populated on FOTW
from IRS Data Retrieval
• Field for student and/or parents to enter
amount from IRS Schedule K-1 will appear if
1040 filed
– Schedule K-1 has income for self-employed
individuals
• Amount entered will be added to total income
earned from work for individual with Schedule
K-1
12
FAFSA on the Web 2014-2015
IRS Data Retrieval
• Who CAN’T use IRS data retrieval:
– Married couples who filed separate tax returns
– Student’s legal parents are unmarried and living
together
– Filed an amended return (must submit original 1040
and 1040x to school)
– Filed Puerto Rican or foreign tax return
– Filed tax return too recently
– Applicants whose marital status changed since
January 1 of the processing year
13
FAFSA on the Web 2014-2015
IRS Data Retrieval
• If family can’t use IRS Data Retrieval, will
need to produce official IRS tax return
transcript if selected for verification
– On-line request at:
http://www.irs.gov/Individuals/Order-aTranscript
• Must type in SSN, name and address
exactly as it appears on tax return
• Can look up zip code at: www.usps.com
to get exact street address
– Touch-tone phone request at:
14
• 1 (800) 908-9946
Other FAFSA Handouts for
Students
• Tips for Completing the 2014-2015
FAFSA
#6
• Completing the FAFSA: Special
Guidance Related to Dependency
Status and Providing Parental
Information
#7
15
FAFSA Training
• More detailed FAFSA training
for new counselors offered at
this workshop following
presentation and Q & A
• Also, FAFSA line-by-line
training offered to professionals
working with students by
– www.minnesotacollegegoal.org
16
FAFSA Results
• Student notified of FAFSA processing results
by:
– E-mail notification with link to student’s SAR
online if student’s e-mail address provided:
• FAFSA on the Web (takes 1-2 days if electronically
signed with PIN; 2 weeks if mailed in signature
page)
• Make sure student adds federal email address to
address book to avoid delivery problems
[email protected]
– If student has a PIN, can view SAR online at
www.fafsa.gov and make corrections
17
If Selected for Verification
• Verification items tailored to each
student and indicated on SAR/ISIR
– Some students may need to verify all
items; others not
• If items limited to data from tax return,
verification can be accomplished
through IRS data retrieval process
alone
• If verification items include both tax
return and other items, then
verification worksheet or other
documentation must also be
completed
18
New Verification Items 2014-2015
• Certain applicants must verify amounts
provided in untaxed income fields on
FAFSA
– Question #45 for student; #94 for parent
• If untaxed income reported along with
taxable income reported on FAFSA do not
appear to provide sufficient support for
family size
– Student and/or parents must explain how
family was financially supported during the
2013 calendar year
19
Professional Judgment
• Normally, a family’s Expected Family Contribution
(EFC) is based on income for the previous tax
year
– For 2014-2015 academic year, tax year 2013
– Financial aid administrators can use their
“professional judgment” to alter data on the
FAFSA for special circumstances (e.g.,
unemployment)
• Adjustments are typically performed as
corrections by the financial aid office after the
original FAFSA is submitted and verified
20
What is a Dependency
Override?
• Gives financial aid administrator authority to allow
otherwise dependent applicant to apply as
independent applicant due to unusual
circumstances
– Parental abuse, abandonment, incarceration, etc.
– Not used simply because student lives outside
parent household after age 18 or parents object to
providing data
• Must be supported by documentation, preferably
by someone outside immediate family
• Student should contact financial aid office for
instructions after submitting FOTW without
parental data
21
Completing FAFSA Without
Parental Information
• For students who don’t qualify for a
dependency override but can’t
provide parental information:
– Will have the option to submit the FAFSA
for an unsubsidized loan only
– FAFSA on the Web will present a path
that allows the applicant to indicate that
he or she will not provide parental data
on the form and will allow the applicant to
submit the FAFSA
– School will later require statement from
one parent that parents refuse to
complete the FAFSA and do/will not
provide financial support to the student
22
Award Notification
• Student should receive award notice
from each college listed on the FAFSA
once admitted to college
– Important that student identifiers on FAFSA
match identifiers used in admissions process
• Financial aid varies depending on the
cost and mix/composition of financial aid
available
• Compare net costs after grants and
scholarships
23
– Use net calculator on college’s web site
or nces.ed.gov/collegenavigator
• Some campuses may use Financial Aid
Shopping Sheet #18
Sources of
Financial Aid
24
Federal Methodology
EFC Calculation
25
Automatic Zero EFC
Formula
Simplified Formula
(assets ignored)
Regular Formula
(both income &
assets)
Parents’ Income
< $24,000
AND
Parents non-filers or
eligible for short tax
form
OR
Parent dislocated
worker
OR
Family received needbased benefits (SSI,
SNAP, Free/Reduced
Price Lunch, TANF,
WIC)
Parents’ Income
< $50,000
AND
Parents non-filers or
eligible for short tax
form
OR
Parent dislocated
worker
OR
Family received needbased benefits (SSI,
SNAP, Free/Reduced
Price Lunch, TANF,
WIC)
Used if conditions for
Automatic Zero EFC
and Simplified
formulas not met
(worksheet in packet)
#9
Cost of Attendance
•
•
•
•
•
•
26
Tuition and fees
Room and board
Books, supplies and equipment
Transportation
Personal expenses
Typically, COA =
T&F + $10,000 to $15,000
Packaging Financial Aid
• In general, need-based financial aid
cannot exceed cost of attendance
minus EFC
• Some forms of financial aid can
replace all or portion of EFC
(Unsubsidized Stafford Loan, PLUS Loan,
certain private scholarships, etc.)
• Most programs require school to
limit financial aid & EFC to cost of
attendance
27
• If financial aid awarded by college
exceeds COA minus EFC, most schools
reduce loans, work study or institutional
aid*
$ 25,800 Cost
- 4,200 EFC
- 1,400 Pell Grant
- 2,100 State Grant
- 10,000 College Sch*
- 10,000 Private Sch
- 5,500 Sub Stafford*
= ($7,400)
Federal Grants & Scholarships
Name
Application
Amount
Eligibility
Pell Grant
FAFSA
$600 - $5,645*
Award does not
vary with price
of college
EFC < $5,081
(Income < $60k for
family of 4).
Limited to 6 FT
years of receipt.
FSEOG
FAFSA
Up to $4,000
Low-EFC Pell
Grant recipients.
Limited funding.
TEACH Grant
FAFSA + TEACH
Agreement
$4,000
Not need-based.
Becomes loan if 4year teaching
requirement not
met.
(https://teachats.ed.gov)
28
(slight reductions
under sequestration)
*Pell Grant maximum for 2014-2015 not yet established
State Grants & Scholarships
(for MN residents attending college in MN)
Check out Handout #10 for Pell & State Grant Look-Up Chart!
Name
Application
Amount
Eligibility
MN State Grant
FAFSA no later than
30th day of term.
FOTW links to online
state questionnaire.
$100 - $10,450
Avg: $1,700
Higher income ranges
than Pell. Varies based
on price of college.
Limited to 4 years of
attendance.
MN Indian
Scholarship
FAFSA + On-line
program application.
Priority deadline July
1.
Up to $4,000
undergrad; $6,000
graduate
¼+ American Indian
ancestry. Show need
for Pell or State Grant.
Postsecondary
Child Care
Grant
FAFSA + Paper
program application
available at college.
$100 - $2,800 per
child for FT
student. Less if PT.
Based on income and
household size.
Limited to 4 years of
attendance.
MN GI Bill
FAFSA + On-line
program application
prior to end of term
29
See
#10
$1,000 Semester
$3,000 Year
Cost minus Pell Grant,
State Grant, Federal
military benefits.
Military service
requirements.
State Changes
• Annual appropriation for MN
Indian Scholarship program
significantly increased
– Previous appropriation $1.8
million
– New appropriation $3.1 million
• Number of recipients will
increase from about 600 to over
900 per year
30
State Changes
• MN Dream Act signed into law May 2013
• Qualifying undocumented students now eligible:
– In-state tuition rates at MnSCU and U of M
– State financial aid programs
– Private scholarships administered by MnSCU/UM
• To meet MN Dream Act requirements:
– Attend MN high school for at least 3 years
– Graduate from a MN high school or earn MN GED
– Comply with Selective Service requirements
• Males 18 to 25 years old must register
– Apply for lawful immigration status once a federal
process for doing so exists (not yet applicable)
31
MN Dream Act Online
State Financial Aid Application
• Undocumented students cannot file a Free
Application for Federal Student Aid
(FAFSA)
– Many lack social security numbers
– Won’t pass legal immigration status edits
• OHE contracted with Need Access to have
students use customized online state
financial aid application for 2013-2014
– Assigns 9-digit number as identifier for
those without SSNs
– Contains questions on the FAFSA and MNspecific questions
– OHE pays all application fees for applicants
32
MN Dream Act Online
State Financial Aid Application
• Link to online state financial aid application and
MN-specific instructions posted on:
– www.ohe.state.mn.us/MNDreamAct
• Two versions of online state application
– MN Dream Act – State Financial Aid and U of M In-State
Tuition (standard version)
– MN Dream Act – Univ of MN In-State Tuition Only (short
version)
• Short version should ONLY be used by U of M students
who do NOT want to apply for state financial aid
• MnSCU campuses making own determinations for
in-state tuition rates; U of M relying on OHE’s review
of application output and documentation
33
Trickiest Part of MN Dream Act Online
State Financial Aid Application
Instead of selecting college name, scroll down and select ‘MN Dream Act –
State Financial Aid and U of M In-State Tuition’ and click on Add button.
34 Later in the application, student is asked to select MN colleges.
After Using MN Dream Act
Online State Application
• Students will receive email confirming
they have used the MN Dream Act online
application
• Email will instruct student to send the
following documentation to OHE:
– MN high school transcripts showing at least 3
years attendance (don’t need to be official)
– MN high school diploma or GED (if transcripts
lack grad date)
– Selective Service registration confirmation
– College transcripts (if student has attended
college for 3 or more academic years)
– Signed federal income tax forms (filers) or W2s
and signed statement (non-filers) for
verification of financial information
35
After Applying and Submitting
Requested Documentation
• Output from state online financial aid
application loaded to new system at OHE
• Once requested documentation received, MN
colleges can access system to certify
student is enrolled and meets other eligibility
requirements (e.g. SAP, etc.)
• OHE system will calculate student’s State
Grant and notify student and college(s) via
secure email
• OHE will send funds to college to cover State
Grant payments for eligible students
36
After Applying and Submitting
Requested Documentation
• State Grant awards fairly low amounts and
will not cover tuition charges
– Calculation formula requires subtraction of
Federal Pell Grant that student would have
qualified for based on EFC even though
undocumented students can’t receive Pell
• College can use output from MN Dream Act
application to award other state financial aid
37
– State Work Study - if student has work
authorization under Deferred Action for
Childhood Arrivals (DACA)
– Postsecondary Child Care Grant
– MN GI Bill
MN Dream Act Online State Financial
Aid Application for 2014-2015 Year
• Will be available January 2014
• Continue to access through
– www.ohe.state.mn.us/MNDreamAct
• Renewal applicants will only have to submit 2013
tax forms and updated college transcripts to OHE
• New applicants will also need to provide final high
school transcript, diploma and/or GED, Selective
Service confirmation
• Please get the word out to your undocumented
high school students!!!
– Refer questions to OHE Grant Unit (651) 642-0567 #2
38
• MN Dream Act fact sheet
#15
(also in Spanish)
Institutional Scholarships
• Many of these listed in central location on OHE
website:
http://www.ohe.state.mn.us/sPagesGR/scholarship
sAll.cfm
• Average scholarship per first-time, full-time
undergraduate for 2010-2011
39
College Type
Average Scholarship
% Receiving
MnSCU 2-Year
$ 1,148
4%
MnSCU 4-Year
$ 2,078
28%
U of M
$ 3,806
58%
Non-Profit 4-Year
$14,837
93%
For-Profit 4-Year
$ 1,536
5%
Private Scholarships
• Student should check with local businesses, civic
organizations, parents’ employers
• Free internet search sites:
www.collegeboard.com/pay
www.fastweb.com
www.studentscholarshipsearch.com
www.gocollege.com
www.finaid.org
www.scholarshiphelp.org
• Free Scholarship Coach handout
#14
• Students should be sure to report any private
scholarships to the financial aid office
40
Federal and State Work Study
• Undergraduate or graduate students
are eligible
• Employment may be on or off
campus – resume builder!
• May work during summer
• Wages won’t count against student’s
future financial aid eligibility on
FAFSA
• Respond ‘Yes’ to Work Study
question on FAFSA
41
– Contact financial aid office for further
information
Student Loan Programs
• Loan comparison chart #12 covers
main features of all federal and state
student loan programs
• Reverse side displays various loan
repayment options for federal student
loans
• General Rule of Thumb:
– Don’t borrow more than expected first
year salary in field
– Monthly payment will typically be around
1% of total student loan debt
42
Bipartisan Student Loan
Certainty Act of 2013
Federal Direct Student Loans 2013-2014 Interest Rates
Effective for Loans With a First Disbursement on or After July 1, 2013
Loan Type
Student Grade Level
Direct
Undergraduate
Subsidized
Students
Loans
Direct
Undergraduate
Unsubsidized
Students
Loans
Direct
Graduate/Professiona
Unsubsidized
l Students
Loans
Parents of Dependent
Undergraduate
Direct PLUS
Students and
Loans
Graduate/Professiona
l Students
Direct
Consolidation
Loans
43
N/A
Cohort
First
First
Disbursed
Disbursed
On/After
Before
Index Rate
10-Year
Treasury
Note Index
Add-On
2013-2014
Fixed Interest
Rate
Interest Rate
Cap
7/1/13
7/1/14
1.81%
2.05%
3.86%
8.25%
7/1/13
7/1/14
1.81%
2.05%
3.86%
8.25%
7/1/13
7/1/14
1.81%
3.60%
5.41%
9.50%
7/1/13
7/1/14
1.81%
4.60%
6.41%
10.50%
Consolidation Loan
Application Received on
or after July 1, 2013
Interest rate remains the weighted average of the
interest rates of the loans included in the
consolidation, rounded up to the next higher oneeighth of one percent. New law removes the 8.25%
cap.
Student Loan Programs
• Parent PLUS loan denials significantly increased
when U.S. Department of Education tightened credit
criteria in October 2011
– Charge-off accounts and accounts in collections
within the past five years were added to list of denial
criteria if they weren’t repaid
• Some billers send accounts to collection when 30 days
past due
– Parents previously approved for PLUS loans now
denied
• U.S. Department of Education contacted denied
applicants for reconsideration in August 2013
• Parents encouraged to contact Student Loan
44
Support Center (800) 557-7394
Tuition Reciprocity
• No significant changes to agreements
– New MN students studying in ND will pay slightly
higher rates
• Allows MN residents to attend in neighboring
states at rate similar to MN resident rate
• Apply directly to ND or SD college if recent MN
high school graduate
• Apply directly to colleges in Manitoba
• All other students must submit application to
Office of Higher Education in MN
– Apply on-line for 2014-2015 after March 1, 2013 at:
– www.getreadyforcollege.org
45
• Reduced rates for MN residents attending select
schools in Illinois, Indiana, Kansas, Michigan,
Missouri, Nebraska under Midwestern Student
Exchange Program (MSEP)
Federal Higher Education
Tax Advantages
•
•
•
•
•
•
American Opportunity Tax Credit
Lifetime Learning Tax Credit
Tuition and Fees Deduction
Penalty Free IRA Withdrawals
Coverdell Education Savings Account
Student Loan Interest Deduction
See Publication 970 at: www.irs.gov for
details
Also, handout #16 in packet
46
Helpful Resources
• College financial aid administrator
knows best!!
– (Contact info provided in Paying for
College)
• Questions on federal aid programs and
application process (800) 433-3243
– www.studentaid.ed.gov
• Office of Higher Education financial aid
staff (651) 642-0567 or (800) 657-3866
– www.getreadyforcollege.org
47
Student Publications
Office of Higher Education
Ordering instructions in right side of packet
(Financial Aid Basics also in Spanish, Hmong, Somali)
Federal publications ordering instructions also included
48
Office of Higher Education
Paying for College Resources
OHE, MN Private Colleges and TPT
collaborated on Paying for College
program
– Targeted to families, especially parents
– Half-hour in length
– Shown periodically on TPT
• OHE has DVDs/downloadable materials
available for groups to use in high school or
community setting
• Also 5 shorter versions designed specifically
for:
– First generation college students, students
interested in 4-Year private colleges
– Somali, Spanish and Hmong language versions
• See handout in right side of packet
49
MAFAA High School Liaison
• Shannon O’Brien
Minneapolis Community and
Technical College
[email protected]
612-659-6237
50
2014-2015 FAFSA on WEB Demo Site
(for financial aid nights)
• In December 2013, FAFSA
on the Web demonstration
site will be available
– To access, go to:
http://fafsademo.test.ed.gov
– Enter:
• User Name: eddemo
• Password: fafsatest
• Click on FOTW button at
bottom of screen to access
demonstration
51