Transcript 2012-13 Financial Aid High School Presentation (PowerPoint)

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What you Need to Know About
Financial Aid For 2015-16
A Presentation by Dorothy Gilliard
Topics We Will Discuss Tonight
 Financial Aid Definition
 Cost
of attendance (COA)
 Expected Family Contribution (EFC)
 Financial Need Definition
 Categories, Types, and Sources of financial aid
 Aid from New
Jersey
 Free Application for Federal Student Aid (FAFSA)
 Special Circumstances
Financial Aid Definition
Financial aid consists of funds provided to students and families to help pay for
postsecondary educational expenses. These funds may be both self-help and
“free” money.
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Cost of Attendance -Definition


Includes

Tuition & Fees

Room & Board

Books, supplies, transportation, and misc. personal expenses

Sometimes can include

Loan fees

Study abroad costs

Dependent care expenses
Varies widely from college to college
Expected Family Contribution (EFC)

Amount family can reasonably be expected to contribute

Stays the same regardless of college

Two components



Parent contribution
Student contribution
Calculated using data from a federal application form (FAFSA) and a federal formula
called Federal Methodology
Financial Need vs. Financial Aid
Cost of Attendance
–
Expected Family Contribution
=
Financial Need
Need will vary based on the cost of the school.
Four Types of Financial Aid

Scholarships

Grants

Loans

Employment
Scholarships and Grants

Money that does not have to be paid back

Awarded on the basis of merit, skill, or unique characteristic

Usually awarded on the basis of financial need
Loans

Money students and parents borrow to help pay college expenses

Repayment usually begins after education is finished

Only borrow what is really needed

Look at loans as an investment in the future
Employment
Allows student to earn money to help pay educational costs

A paycheck; or

Non-monetary compensation, such as room and board
Sources of Financial Aid

Federal government

States

Private sources

Civic organizations and churches

Employers
Federal Government

Largest source of financial aid

Aid awarded primarily on the basis of financial need

Must apply every year using the Free Application for Federal Student Aid
(FAFSA)
States

Residency requirements

Award aid on the basis of both merit and need

Use information from the FAFSA

Deadlines vary by state; check paper FAFSA or FAFSA on the Web site
Common Federal Aid Programs

Federal Perkins Loan
◦



varies
Interest Rate: 4.66%
Federal Pell Grant
◦

◦
Interest Rate: 7.21%
$4000
Federal Supplemental Educational
Opportunity Grant
PLUS Loans
◦
$5,730
Teacher Education Assistance for
College and Higher Education Grant
◦
Subsidized and Unsubsidized Loans
◦

Interest Rate: 5%
Federal Work-Study
◦

$100 - $4000
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Direct Loans – Annual Loan Limits

Annual Loan Limits (combined subsidized and unsubsidized)

Classification
Dependent
Independent

Freshman
$5,500
$9,500

Sophomore
$6,500
$10,500

Each remaining year
$7,500
$12,500

Graduate/Professional
N/A
$20,500
THE FAFSA –FEDERAL AID-STATE AID – COLLEGE CONNECTION
New Jersey State Grants 2014-2015 Academic
Year
(2015-2016 Award amounts available after Governor signs FY 2016
Budget
and is approved by board of trustees)
Award Type
Award Amounts
Full-Time TAG
$576 - $12,016
Part-Time
$568 -$1942
EOF
Up to $2,500
NJ STARS
Tuition Only
NJ STARS II
Up to $2,500
Governor’s Urban
Scholarship
Up to $1,000
NJ-GIVS
to $2,000
Secondary
School Counselor TrainingUp
Institute
2014
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New Jersey Financial Aid, cont’d
NJ Class Loan
The NJCLASS loan features:
Low interest rate
Interest rate is not based upon the borrower's creditworthiness
Up to 3% administration fee
The option for students or parents to borrow
Flexible repayment options
Your choice of repayment: 10, 15 or 20 years







Loan Interest Rates & Features

10 YR REPAYMENT AT 6.15%
Immediate repayment of princ and interest
15 YEAR REPAYMENT AT 7.05%



Immediate repayment of princ and interest
Immediate repayment of interest only
20 YEAR REPAYMENT AT 8.05%


Full deferment until out of school
3% Administrative Fee for all loans


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HESAA AID Application Requirements

NJ requires addtl data elements other than what is reported on
the FAFSA to determine eligibility for TAG and NJ STARS I and
II

Driver’s License Info

Veterans Education Benefits (independent students)

Untaxed Social Security Benefits

Earned Income Credit

Once you get to the confirmation page of the FAFSA you should
select the second option to report this information to HESAA.
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NJHESAA aid application
REQUIREMENTS
HOW TO APPLY FOR FINANCIAL AID?

Free Application for Federal Student Aid (FAFSA)

Required for all types of federal aid

May be filed electronically (preferred) or via paper form



File online at www.fafsa.ed.gov after January 1, 2015
Sign the electronic form with a PIN.
Later this year you will be able have one mailed to you by
calling 800-4-FED-AID (1-800-433-3243)


Results sent electronically to you (if you give your email
address) and to the institutions you list on the FAFSA
FAFSA on the Web
 Website: www.fafsa.gov
 FAFSA


on the Web Worksheet:
Used as “pre-application” worksheet
Questions follow order of FAFSA on the Web
 PDF FAFSA
will also be available if you want to complete the
FAFSA online; then download the form and mail it in.
Federal Student Aid Personal Identification
Number (FSA PIN)
 Website: www.pin.ed.gov
 Sign FAFSA
electronically
 Not
required, but speeds
processing
 May be
used by students and
parents throughout aid process,
including subsequent school
years
FAFSA on the Web
Good reasons to file electronically:
 Built-in
 Skip
edits to prevent costly errors
logic allows student and/or parent to skip unnecessary questions
 Option to use Internal Revenue Service (IRS) data retrieval
 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 application process in the future
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Click
Here >
FAFSA On The Web
www.fafsa.gov
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Caution: Do Not Visit This Site in
Error!!!!!!!!!
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Login:
(Student’s
Info)
First Name
Last Name
SSN
Date of Birth
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STUDENT
Demographic
Information
Student’s Demographic Information

SSN (data match)

Name

DL

DOB

Address

Citizenship Status (data match)

Selective Service Registration (data match)

Male students ages 18-25
Student’s Income and Asset Information

Tax Return Status

Income (50%)


IPA – income protection allowance – allows a certain percentage of
income/assets to not be included in the formula

It varies according to the number in the parents’ household and the number in
college
Assets (20%)

Cash, Savings, Checking

Other Investments****
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Dependent vs. independent
Does the
student have
to use their
parents
information?
Dependency questions
How do you determine if a student is “independent”?

Born before January 1, 1992

Married

Pursuing an advanced degree

Veteran of the Armed Forces

Legal Dependents (do not provide information on the FAFSA)

Parents deceased or student was or is in Foster Care

Ward of the Court

Unaccompanied Youth who was Homeless
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If a student is dependent parents must
participate in the fafsa process!!!!!
What
if the
parents
refuse?
If parent’s refuse the student will not
be able to get any financial aid.
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Information parents are required to
provide
PARENT
Demographic
Information
PARENT
Demographic
Information





Marital Status
 Married or Remarried
 Single
 Divorced or Separated
 Widowed
SSNs/DOBs/Last
Names and First
Initial (IRS Match)
Email Address
# in Household
# in College
Parent’s Income Information


Type of Tax Return you filed (or will file)
Dislocated Worker Status
Receiving unemployment benefits due to being laid off or losing a job
Was self-employed but is now unemployed due to economic conditions
Is a displaced homemaker: a person who previously provided unpaid services to the family, e.g. a stay-athome mom or dad, is no longer supported by the spouse and is having trouble finding meaningful work







Adjusted Gross Income from your Income Tax Return
Taxes Paid from your Income Tax Return
Breakdown of Income from work for both parents
Allowances:




Living Expense Allowance
Employment Tax Offset (based on the highest salary)
Income Protection Allowance
State Tax Allowance
Once the allowances are applied to your income the resulting amount is used in the calculation of the
EFC.
Simplified Needs Test

Anyone included in the parents’ household size (as defined on the FAFSA)
received benefits during 2014 or 2015 from any of the designated meanstested Federal benefit programs: (SSI) the Food Stamp Program, the Free and
Reduced Price School Lunch Program, TANF) Program, OR

the student’s parents:

• filed or were eligible to file a 2014 IRS Form 1040A or 1040EZ,

• filed a 2014 IRS Form 1040 but were not required to do so, or

• were not required to file any income tax return; the student’s parent is a
dislocated worker.

AND

(2) The 2014 income of the student’s parents is $49,999 or less.

• For tax filers, use the parents’ adjusted gross income from the tax return to
determine if income is $49,999 or less.
Who Qualifies for An Automatic Zero EFC?

Anyone included in the parents’ household size (as defined on the FAFSA)
received benefits during 2011 or 2012 from any of the designated
means-tested Federal benefit programs: SSI, Food Stamps, the Free and
Reduced Price School Lunch Program, TANF, and WIC; OR

The student’s parents:

• filed or were eligible to file a 2014 IRS Form 1040A or 1040EZ,

• filed a 2014 IRS Form 1040 but were not required to do so, or

• were not required to file any income tax return; OR

the student’s parent is a dislocated worker.

AND

(2) The 2014 income of the student’s parents is $23,000 or less.
Parent’s asset information

Assets you DO INCLUDE:


Cash, Savings, Checking
Real Estate (other than your primary residence)
The Federal need analysis methodology ignores the net
market value of the family's primary residence.
Sometimes, however, the family's primary residence is a
multi-family dwelling. For example, the family might own
a duplex, living in one half and renting out the other.
For multi-family homes and apartment buildings where the
owner occupies a unit, the portion not occupied by the
owner is treated as an investment asset



Non-Retirement Investments
Business Value (if you are self-employed and employ
more than 100 people)
529 College Savings Plans ******
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529 PLANS
A
529 account owned by a parent for a
dependent student is reported on the federal
financial aid application (FAFSA) as a parental
asset.
A
student--owned 529 account is to be
reported as parental assets, if the student
files the FAFSA as a dependent and has to
include parent assets and income. This
treatment confers a financial aid benefit as
the parental rate of inclusion is considerably
less l than the 20% rate on non-529 assets
owned by the student.
Parent’s asset information

Assets you DO NOT INCLUDE



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
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
The value of Life Insurance
Retirement plans (401K)
Pension Funds
Annuities
Non-Education IRAs,
Keogh Plans, etc.
UGMA and UTMA accounts for which you are the custodian, but not
the owner.
A percentage of your asset value is used in the calculation along
with the Education Savings and Asset Protection Allowance. That
percentage usually does not exceed around 5.64%
Education Savings and Asset Protection
Allowance
FAFSA Processing Results
Central Processing System (CPS) notifies student of FAFSA
processing results by:
Paper
Student Aid Report (SAR) if paper FAFSA
was filed and student’s e-mail address was not
provided
SAR
Acknowledgement if filed FAFSA on the Web
and student’s e-mail address was not provided
Student with PIN may view SAR on-line
www.fafsa.gov
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7 Ways to Blow Your FAFSA


Playing the Waiting Game
 FAFSA requires all sorts of tax-related information, so a lot of parents
wait till they've filed their taxes by April to start working on the form.
That's a big no-no, especially as many states have their own deadlines
for submission of their own info.
Fudging your Tax Information
 If your household earns enough to file taxes, you won't have a hope of
getting financial aid until you've filed. The Dept. of Education and IRS
are working together to crack down on families who under-report their
taxable income on FAFSA forms, Kantrowitz says, in the hopes of
lowering the existing 4-5% fraud rate.
 Other tax errors: Reporting your total income tax as equal to your
Adjusted Gross Income (AGI) Reporting taxes withheld or tax due
instead of total income tax. "Be sure you are reporting the total total
income tax (the total tax liability) and not just the withholdings or the
additional taxes due
7 Ways to Blow Your FAFSA

Marital Status Mix-Ups


Divorced parents: Whichever parent the student has lived with the
most over the last 12 months should be responsible for the FAFSA.
If the filing parent has re-married, his or her new spouse must
report their income on the form as well
Miscalculating Assets


If you're filing as a dependent student, remember that you don't
have to include certain assets on your FAFSA: Custodial 529 college
savings plans, custodial prepaid tuition plans, custodial Coverdell
Education Savings Accounts.
Also, parents and independent students shouldn't include their
401(k), IRA, pensions, or life insurance policies as assets.
7 Ways to Blow Your FAFSA



Forgetting Who The Forms About
 The FAFSA form is about the student, not the parent, although both are
usually involved in the process. Pay close attention to whose
identification information the form is seeking. It's almost always
referring to the student, and if someone slips up and throws a parent's
SSN in somewhere, it could throw a wrench in the application process. If
the parent has no SSN, use the code "000-00-0000" rather than making
up one or using a taxpayer ID.
Silly Errors
 Both parents and students are guilty of these mistakes: misspelled
names, missing question fields and incorrectly written dollar values. For
example, FAFSA forms don't read cents, so you need to type $500
rather than $500.00. Otherwise, it'll be read as $50,000
Not Applying At All

You can't get any money if you don't apply and it's important
everybody apply for FAFSA, even if you don't expect to qualify
FAFSA Processing Results

Institutional Student Information Record (ISIR) sent to colleges listed on FAFSA
approximately 10 to 14 days after FAFSA submitted

College reviews ISIR

May request additional documentation, such as proof that a sibling is enrolled in college

Will use the results of the FAFSA to determine eligibility and awarding of aid
Student Aid Report

This report is what is sent to the student after FAFSA information is processed.

Student should review data for accuracy; make any necessary changes; re-submit

Update estimated information when actual figures are available using the IRS Data
Retrieval Process.
Making Corrections
If necessary, corrections to FAFSA data may be made by:

Using FAFSA on the Web (www.fafsa.gov) if
student has a PIN;
Updating paper SAR (SAR Information
Acknowledgement cannot be used to make
corrections); or

Submitting documentation to college’s financial aid
office

Special Circumstances

Cannot report on FAFSA

Send written explanation to financial aid office at each college

Change in employment status

Medical expenses not covered by insurance

Change in parent marital status

Unusual dependent care expenses

Student cannot obtain parent information
Where do YOU go from here?
Obtain and review admissions and financial aid Web
sites and materials for each school to which you are
applying.
Meet all application deadlines.
Complete FAFSA and other application materials.
Submit all requested follow-up documents.
Investigate other sources of aid.
Questions?