Transcript Slide 1

Paying for College
Financial Aid 101
Mary Anne Hunter
College Access Team
CO Dept. of Higher Education
College Access Team
• The College Access Team helps families break down the
financial barriers to college.
• Colorado Department of Higher Education
• Funded by a Federal College Access Challenge Grant
• 700+ financial aid, scholarship, FAFSA and financial
education workshops
• FREE
Disclaimer
• The information presented is informational
only. All program information is general in nature
and is not necessarily all inclusive. The Colorado
Department of Higher Education (CDHE) makes
no representation regarding suitability of the
information presented. The reference to
websites external to CDHE have been provided
for convenience and should not be construed to
indicate endorsement. Rules and regulations
governing financial aid programs may be subject
to change without notice.
What we’ll cover in this presentation
• College Cost – the student budget
• What kind of financial aid is available
• How to apply for financial aid
• Scholarships
• Helpful websites
What do we mean by “College”?
2-Year or Community College
Certificate
Associates Degree
4-Year College
Bachelors Degree
Masters Degree
Vocational or Technical College
Certificate
Proprietary/Trade Schools
Certificate
Associates Degree
Bachelors Degree
Cost of Attendance (COA)
Student Budget
• Cost of attendance refers to the cost for attending college for one
year (2 semesters)
• Colleges often define total cost of attendance to include:
– Tuition and fees
– Room and board
Fixed Costs
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Variable Costs
Books and supplies
Medical expenses
Transportation
Personal expenses
College Costs (Examples Only)
Community
College
Private 4 Year
Tuition & Fees
$2,000-3,500
$5,500-8,500
$30,000-$39,000
Room & Board
8,000
9,700
9,300
Books/Supp
1,750
1,750
1,750
Personal/Med
3,100
3,400
3,800
Transportation
1,300
1,300
1,300
$16,200-17,700
$21,600-24,600
$46,000-55,000
Direct
Variable
Public 4 Year
TOTAL
Resident –vs- Non-Resident Tuition
(Examples Only)
Community College
4-Year Public
In-state Tuition
$2,000-$3,500
In-state Tuition
$5,500-$8,500
Out-of-state Tuition
$5,050-$6,500
Out-of-state Tuition
$15,800-$29,500
Source: Hispanic Scholarship Fund
Western Undergraduate Exchange Program (WUE)
• Alaska, Arizona, California, Colorado, Hawaii, Idaho,
Montana, Nevada, New Mexico, North Dakota, Oregon,
South Dakota, Utah, Washington, Wyoming
• Reciprocal agreement to discount non-resident tuition
• Must maintain specific GPA and meet special deadlines
• Dependent upon school and program of study
• www.wiche.edu/wue
TYPES OF FINANCIAL AID
Grants
Federal, State, Institutional
Don’t need to be paid back
Scholarships
Don’t need to be paid back
Maintain certain grades
Work-study
Part-time work around your class schedule
Student Loans
Federal Loans
Paid back at federally backed low interest rates with helpful terms
There are federal loans for students (Stafford loans) and parents
(PLUS loans)
Private Loans
Use federal first and be sure to research the rates and terms
carefully if you need a private loan to fill the gap.
Pays a portion of total in-state tuition per credit hour…
$62 per credit hour at public 2/4-year colleges & universities
= approx. $1488 p/year
$31 for Pell-eligible students at private Colorado colleges
(University of Denver, Regis University and Colorado Christian
University)
• Must apply – just once at www.collegeincolorado.org
• Must be admitted to participating institution
• Available for undergraduates only
• Paid directly to the college
Stafford Loans
Low fixed interest rates
• 6 month grace period
• In student’s name
• No credit check/income verification
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Subsidized Stafford
• Need-based
• Interest Rate = 3.40% (2011-12)
• Government pays interest
while in school & during grace
period
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Unsubsidized Stafford
Not need-based
Interest rate = 6.8%
Student pays interest/
accrues while in school &
during grace period
Can pay quarterly or capitalize
Annual Loan Limits
Annual Loan Limits - Stafford Loan
Dependent Students
Combined Base Limit for
(whose parents were not denied Subsidized and Unsubsidized
a PLUS loan)
Loans
Additional Limit for
Unsubsidized Loans
Total Limit for Unsubsidized
Loans (minus subsidized
amounts)
First-Year Undergraduate
(Freshman)
$3,500
$2,000
$5,500
Second-Year Undergraduate
(Sophomore)
$4,500
$2,000
$6,500
Third-Year and Beyond
Undergraduate (Junior, Senior)
$5,500
$2,000
$7,500
Federal Parent Loan for Undergraduate Students
PLUS Loans
• In parent name - for parents of undergrad. dependent students
• Fixed interest rate of 7.9%
• Credit check required
– If denied, student is eligible for additional unsubsidized Stafford allowance
• Repayment begins 6 weeks after the loan is fully disbursed – or parent may defer repayment:
– while the student on whose behalf the parent borrowed the loan is
enrolled on at least a half-time basis, and
– for an additional six months after the student ceases to be enrolled at
least half-time.
• $ = up to unmet need
• Fees - up to 4%
Private/Alternative Student Loans
 Higher interest rates and variable (Prime/LIBOR)
 Based on credit score & income = parents typically
co-sign
 Interest rate & fees determined by credit score
 Less favorable repayment & deferment terms than
Federal student loans
 Use federal loans first
 Consider PLUS/home equity loans
 Talk to financial aid office first
Satisfactory Academic Progress (SAP)
• Three components:
– Grade Point Average (GPA) – usually C Average – determined
by college – could be different than academic standard
– Completion Rate – must complete certain percentage of
classes
– Credit Limit – cannot exceed determined credit total for
program of study (i.e. 180 total)
• Probation/Suspension
• Appeal process
How do I apply?
Start with the FAFSA
Free Application for Federal Student Aid (FAFSA)
– Apply Early! Some Financial Aid is awarded on a firstcome-first-served basis
– Must file every year after January 1
– Up to 10 colleges can be designated to receive FAFSA data
How to Submit the FAFSA
– Online application is fastest – up to 10 days processing time
– Student and one parent need to get Personal Identification
Numbers (PIN) to sign application electronically
– Parent and Student Information required:
• Social security numbers, drivers license numbers, DOB
• 2010 tax records, bank statements, savings/investments,
business value
– Complete FAFSA online at http://www.fafsa.gov
– 1-800-4FEDAID for assistance
• BEWARE of any service that requires you to pay a fee to
submit your FREE application
Documents/Information Needed
For the 2011-2012 school year you will need financial information from 2010. You will need to
refer to:
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Student’s & parent’s Social Security Numbers. Be sure it is correct!
Student’s alien registration or permanent resident card (if you are not a U.S.
citizen)
Student’s driver's license (if any)
Student’s & Parents’ 2010 W-2 Forms and other records of money earned
Student’s & Parents’ 2010 Federal Income Tax Return - IRS 1040, 1040A, 1040 EZ
Foreign Tax Return, or Tax Return for Puerto Rico, Guam, American Samoa, the U.S.
Virgin Islands, the Marshall Islands, the Federal States of Micronesia, or Palau
Student’s & Parents’ 2010 untaxed income records
Veterans noneducation benefit records
Child support received
Worker's compensation
Student’s & Parents’ current bank statements
Student’s & Parents’ current business and investment mortgage information,
business and farm records, stock, bond and other investment records
Taxes & Untaxed Income
IRS Matching Option for Income Information
Filers may need to wait up to 3 weeks after
e-filing tax return to request data download
Dependent – vs – Independent
…use parents income/asset info.
Can student answer “Yes” to any of the following….
• Were you born before January 1, 1988?
• As of today, are you married?
• At the beginning of the 2011-2012 school year, will you be working
on a master's or doctorate program?
• Are you currently serving on active duty in the U.S. Armed Forces
for purposes other than training?
• Are you a veteran of the U.S. Armed Forces?
• Do you have children who will receive more than half of their
support from you between July 1, 2011, and June 30, 2012?
• Do you have dependents (other than your children or spouse) who
live with you and who receive more than half of their support from
you, now and through June 30, 2012?
Who is considered a parent?
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If your parents are married, answer the questions about both parents.
If your parent is widowed or single, answer only the questions about that parent.
If your parents have divorced or separated, answer only the questions about the parent that
you lived with most during the last 12 months. If you did not live with one parent more than
the other, answer only the questions about the parent who provided most of your financial
support during the last 12 months.
If your parent has remarried after being widowed or divorced, answer the questions about
both your parent and your stepparent.
If you have a legal guardian, you cannot use your legal guardian's information on your
application. A legal guardian is not considered a parent in the financial aid process.
If you have foster parents, you cannot use your foster parent's information on your
application. A foster parent is not considered a parent in the financial aid process.
If you were adopted, follow the instructions above for parents, based on your parents'
current marital status.
Note: The following people are not considered parents on this form unless they have legally
adopted you: grandparents, foster parents, legal guardians, older brothers or sisters, and
uncles or aunts.
Investments to Include and Exclude
INCLUDE
 Real estate (do not include
the home
you live in)
 Trust funds
 Uniform Gifts/Transfers to Minors Act
Accounts (UGMAs /UTMAs)
 Money market funds
 Mutual funds
Certificates of deposit
Stocks, stock options, bonds & other
securities
Installment and land sale contracts
(including mortgages held)
Commodities
Qualified educational benefits or
education savings accounts (e.g.
Coverdell savings accounts, 529
college savings plans and the refund
value of 529 prepaid tuition plans)
Business and/or investment farm value includes:
the market value of land, buildings, machinery,
equipment, inventory, etc. Business and/or
investment farm debt means only those debts for
which the business or investment farm was used
as collateral.
EXCLUDE
- The home you live in
- Value of life insurance
- Retirement plans (401[k] plans, pension funds,
annuities, non-education IRAs, Keogh plans,
etc.)
- Cash, savings and checking accounts already
reported
- Business value does not include the value
of a small business if your family owns
and controls more than 50 percent of
the business and the business has 100
or fewer full-time or full-time
equivalent employees.
- Investment farm value does not include
the value of a family farm that your
live on and operate.
Frequent FAFSA Errors
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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
Assets & investment – realestate
FAFSA is not signed (by student & one parent)
Extenuating Circumstances
• Decreased income from 2010
• High medical expenses not covered by insurance
• Special needs students
No place to report on FAFSA
Contact Financial Aid Office
Provide documentation
Need may be recalculated
What is the Expected Family Contribution (EFC)
• Calculated amount family can reasonably be expected to
contribute toward student’s education each academic year – But
not necessarily what family may end up paying out-of-pocket
• Two components
+ Parent contribution
+ Student contribution
• Protections/Allowances: family maintenance costs - # in family – #
going to college - age of oldest parent
PARENTS
INCOME
STUDENT
Income Protection Allowance 1st $3,500 not counted
CHECKING/SAVINGS
20%
50%
INVESTMENTS
5%
20%
Financial Need
Cost of Attendance (COA)
- Expected Family Contribution (EFC)
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= Financial Need
EFC Remains Constant
Community
College
Four Year
Public
Four Year
Private
COA (variable)
$17,700
$24,600
$55,000
EFC (fixed)
$1,000
$1,000
$1,000
Need (variable)
$16,700
$23,600
$54,000
The Financial Aid Process
FAFSA to Processor
FAFSA Data
College(s)
Financial
Aid Office
Student Aid Report (SAR)
STUDENT
Check if accepted
for Admission
Requested documents/
Accept Award Package
Financial Aid Award
Get FREE Help with the FAFSA
COLLEGE GOAL SUNDAY
• February of each year
• 15 locations around the state
• Information on scholarships and college planning
• Scholarship giveaways
• www.collegegoalcolorado.org
SCHOLARSHIPS
Inquire about scholarships through:
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High School
College(s) student is interested in attending – Admissions/Financial Aid
Local businesses
Religious organizations
Places of employment
Networking – Facebook, Twitter, MySpace, social gatherings, neighbors
Internet
• www.collegeincolorado.org
• https://secure.collegeincolorado.org/Images/CiC/pdfs/scholarship_list.pdf
• www.fastweb.com
– CollegeInvest
• www.collegeinvest.org
What Are Scholarship Awards Based On?
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GPA
GENDER
AGE
TALENT
HOBBIES
RELIGION
1ST GENERATION
COLLEGE STUDENT
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ATHLETICS
COMMUNITY SERVICE
FINANCIAL NEED
ETHNCITY
COLLEGE MAJOR/ MINOR
GEOGRAPHIC LOCATION
CLUBS/TEAMS
LEADERSHIP ACTIVITIES
CollegeInColorado.org
The Match-Up
Everything You Need to Know
CollegeInColorado.org
Helpful Tools
FAFSA
http://www.fafsa.ed.gov
FAFSA 4Caster
http://www.fafsa4caster.ed.gov
See what your EFC might look like
Types of federal financial aid & the process
http://studentaid.ed.gov
College In Colorado
http://www.collegeincolorado.org
CollegeInvest
http://www.collegeinvest.org
www.educationcents.org
Western Undergraduate Exchange Program (WUE)
www.wiche.edu/wue
Questions
?